Hewlett-Packard (HWP) was down 3.2% in midmorning after the computer and printer maker said it was buying Comdisco's (CDO) technology services business for about $610 million. The sale coincides with an announcement from Comdisco that its parent company and U.S. subsidiaries have filed for Chapter 11 bankruptcy.
The deal, expected to close in the fourth quarter pending court approvals, includes U.S. operations and stock in European operations. The units employ more than 1,300 employees worldwide and generated revenue of about $440 million during Comdisco's fiscal year 2000, Hewlett-Packard said. The company expects the purchase to add to its earnings per share in fiscal 2002.
In addition to the sale, Comdisco said it will cut 200 jobs, less than 10% of its North American workforce. The company said it has received commitments for $600 million senior secured financing led by
. Comdisco expects to emerge from Chapter 11 in early 2002.