IT services and equipment leasing firm Comdisco and 50 of its U.S. subsidiaries have filed for Chapter 11 bankruptcy protection. Comdisco's operations outside of the U.S. are not included in the filing.
Hewlett-Packard (HP) has agreed to acquire the services unit of the bankrupt Comdisco Inc. for US$610 million in cash, HP said Monday. HP's deal with Comdisco is subject to bankruptcy court and regulatory approvals.
HP will acquire most assets of Comdisco's Availability Solutions consulting business, which currently employees 1,300 worldwide and generated $440 million in revenue during Comdisco's fiscal year 2000, ended Sept. 30. The division serves around 3,000 customers in North America, Europe, and Asia.
HP plans to integrate the Comdisco unit into the HP Operations segment of its HP Services division. The company will support services for non-HP hardware, and customers will be able to continue working with Comdisco account managers and staff, HP assured customers in a memo posted on HP's Web site.
HP Services has 28,000 employees, and generated $7.13 billion during HP's 2000 fiscal year. The Comdisco transaction is expected to close during HP's fourth fiscal quarter, ending Oct. 31.
Services is a hot sector currently in the IT industry, and HP joins several other large vendors looking to strengthen their offerings. Sun Microsystems Inc. and Electronic Data Systems (EDS) Corp. said Monday that they are expanding their joint services program, an alliance the companies expect to generate $3 billion in sales over the next five years. Earlier this year, Compaq Computer Corp. tried to acquire Proxicom Inc. to expand its global services business, a deal that fell though when another firm tendered a higher bid.
Shares of HP (HWP) were down 4.1 percent Monday afternoon, trading at $26.83 on the New York Stock Exchange. Comdisco (CDO) was trading down 31 percent, at $1.07, also on the New York Stock Exchange.