How The Reverse Morris Trust Will Deliver $8.5 Billion After Tax Value To HPE?

June 2nd, 2016 by Trefis Team
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With its earnings release on May 24th, Hewlett-Packard Enterprise (NYSE:HPE) announced that it was spinning off its enterprise services unit into a separate entity. This unit would then be merged with Computer Science Corporation through the tax-free Reverse Morris Trust. HPE will own around 50% of the new entity.  As a result, the  company would be able to  unlock value worth $8.5 billion for its shareholders. The management believes that HPE will be able to sharpen its focus on the next generation Software Defined Infrastructure that leverages the breadth of its portfolio, including its servers, storage, networking, and converged infrastructure, as well as its Helion cloud platform and software assets.  The details of this transaction are as follows:

HPECSCEnter

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment / ask questions on the comments section
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our full analysis for Hewlett Packard Enterprise

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