HOUSTON & SUNNYVALE, Calif. - Hewlett Packard Enterprise (NYSE: NYSE:HPE) has entered into a definitive agreement to acquire Juniper Networks, Inc. (NYSE: NYSE:JNPR) for $40.00 per share in an all-cash transaction valued at approximately $14 billion.
The acquisition, which is expected to close between late 2024 and early 2025, will see Juniper Networks' shareholders receive a 32% premium on the closing stock price as of January 8, 2024.
The transaction is set to double HPE's networking business, positioning the company as a leader in AI-native networking solutions for secure, unified technology from edge to cloud. The deal is anticipated to be accretive to HPE's non-GAAP EPS and free cash flow in the first year following the close.
Juniper Networks' CEO, Rami Rahim, will lead the combined networking business of the new entity, reporting to HPE President and CEO Antonio Neri. Neri stated that the acquisition aligns with HPE's strategy to drive innovation and growth in high-margin networking while expanding their total addressable market.
The combined portfolio of HPE and Juniper is expected to offer a complete set of networking solutions that leverage AI to enhance user experiences and streamline operations. The acquisition also aims to create operating efficiencies and achieve run-rate annual cost synergies of $450 million within 36 months post-close.
The financing for the acquisition is based on commitments for $14 billion in term loans, which HPE plans to replace in part with a combination of new debt, mandatory convertible preferred securities, and cash on the balance sheet. The goal is to reduce leverage to approximately 2x within two years following the close of the transaction.
This strategic move is anticipated to increase HPE's networking segment revenue from approximately 18% to 31% and contribute over 56% of the company's total operating income. The acquisition is subject to regulatory approvals, approval by Juniper shareholders, and other customary closing conditions.
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