11.30.2012

HP's "Project Tesla"


How a desperate HP suspended disbelief for Autonomy deal
Excerpt:


After two months of negotiations on what was known at HP as "Project Tesla," Apotheker sat down with Lynch at a hotel in Deauville on the Normandy coast - and shook hands on what would become an $11.1 billion deal.

The Autonomy takeover was indeed a bombshell - but not in the way that Apotheker had hoped. When it was announced in August 2011, HP's stock plummeted amid withering criticism of the price tag.

Within weeks, Apotheker was out of a job. Within months, Lynch and his new masters at HP were at war. Inside a year, Lynch had been forced out and HP was investigating allegations of major accounting irregularities at Autonomy. That culminated in HP saying last week it was writing off more than three-quarters of the value of Autonomy, and telling U.S. and UK regulators about alleged accounting fraud.

... While the price haggling was going on, a large due diligence team numbering in the hundreds, including internal HP staff from all relevant departments like finance, poured over Autonomy's books, examined contracts, and interviewed Autonomy's top executives, sources said. External experts involved in the process included accounting firm KPMG, law firms and bankers.

Due diligence was seen being straightforward as Autonomy had been filing its accounts publicly and they had been audited. One source said the month-long process was extensive and meticulous but nothing special.
Comment: Much more in the article about the due diligence process. Image source. And what was the end of Nikola Tesla? (Wiki article): "He died penniless and in debt "

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