Hewlett Packard Enterprise (HPE) has announced the successful completion of its previously announced acquisition of Juniper Networks, Inc., a leader in AI-native networks. The combination positions HPE to capture the growing AI and hybrid cloud market opportunity by creating an industry-leading cloud-native and AI-driven IT portfolio, including a full, modern networking stack.
The transaction doubles the size of HPE’s networking business and provides customers with a comprehensive portfolio of networking solutions. It also accelerates the company’s portfolio mix shift to higher-margin, higher-growth areas and positions the company for long-term profitable revenue growth.
Describing the acquisition as a new era for HPE, President and CEO Antonio Neri said: “We are now at the epicentre of the transformation of IT, where AI and networking are converging. In addition to positioning HPE to offer our customers a modern network architecture alternative and an even more differentiated and complete portfolio across hybrid cloud, AI, and networking, this combination accelerates our profitable growth strategy as we deepen our customer relevance and expand our total addressable market into attractive adjacent areas. We look forward to welcoming the Juniper team to HPE.”
“HPE and Juniper have a unique opportunity to disrupt the networking industry at the most important and relevant time,” said Rami Rahim, former CEO of Juniper Networks, who will now lead the combined HPE Networking business. “Together, we’ll be able to provide customers and partners with a secure network that is purpose-built with AI and for AI.”
According to HPE, the strategic and financial benefits of the acquisition include:
- Transformative for HPE’s strategic evolution: The acquisition accelerates HPE’s strategic vision with a full networking IP stack: from silicon, to hardware, to the operating system, to security, to software and services, with a cloud-native and AI-driven approach. This integration will accelerate customers’ deployment and adoption of both hybrid cloud and AI.
- Bolsters HPE’s position as a networking leader: The acquisition doubles the size of HPE’s networking business, substantially increasing its scope and total addressable market. The combined company will reach large adjacent markets, including data centre, firewalls, and routers, bridging the global strength of HPE in enterprise security-first networking and SASE security with Juniper’s position in data centre, service provider, and AI-native solutions.
- Provides customers with a leading AI-native foundation: The transaction builds on the combined capabilities of HPE and Juniper to provide customers of all sizes with the modern networking architecture to manage and simplify increasingly complex connectivity needs – particularly those driven by data-intensive, hybrid AI workloads.
- Gives customers access to HPE’s full portfolio: Networking customers will benefit from HPE innovation across its full portfolio – including hybrid cloud, storage, compute, and software – to accelerate and simplify their AI transformations.
- Capitalises on HPE’s go-to-market scale: The transaction creates revenue growth opportunities, as Juniper offerings benefit from HPE’s large, global go-to-market model and team. The combined company will offer secure, AI-native solutions with the ability to collect, analyse, and act on insightful network data across a broader installed base.
- Attractive financial profile: The acquisition of Juniper’s high-margin business is expected to be accretive in the near- and long-term. It will be accretive to non-GAAP EPS in year one post-close, with the combined networking business contributing more than 50% of total company operating income.
The acquisition was originally announced on 9 January 2024 and was approved by Juniper shareholders on 2 April 2024. With the completion of the transaction, shares of Juniper’s common stock will cease trading and will no longer be listed on the NYSE.
Advisors
J.P. Morgan Securities LLC and Qatalyst Partners served as HPE’s financial advisors. Committed financing for the transaction was provided by Citigroup Global Markets Inc., JPMorgan Chase Bank, N.A. and Mizuho Bank, Ltd. Wachtell, Lipton, Rosen & Katz, Freshfields Bruckhaus Deringer LLP, and Covington & Burling LLP served as legal counsel. FGS Global served as HPE’s strategic communications advisor. Goldman Sachs & Co. LLC served as Juniper’s exclusive financial advisor and Skadden, Arps, Slate, Meagher & Flom served as legal counsel.
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