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HPE-Nutanix M&A Discussions: Will More Bidders Emerge?

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Hewlett Packard Enterprise (HPE) has explored a potential Nutanix acquisition in recent months, Bloomberg reported. It's unclear if HPE will actually acquire Nutanix, the report added. Read between the lines, and the leak could be designed to bring more bidders to the Nutanix negotiating table, ChannelE2E speculates.

Nutanix, founded in 2009, is based in San Jose, California. The company has 7,314 employees list on LinkedIn. Nutanix began life as a hyper-converged infrastructure (HCI) vendor -- essentially providing storage, compute and virtualization on hardware.

Amid rising competition from public cloud service providers, Nutanix and its channel partners had to pivot hard to subscription-based software for hybrid-cloud use cases.

Nutanix: Current Revenues, Market Capitalization

Fast forward to present day, and Nutanix ($NTNX) is growing -- though M&A rumors swirl regularly around the company. Revenues were $433.6 million in the company's most recent quarter, up 15% from the corresponding quarter last year, Nutanix disclosed on November 30, 2022.

Nutanix's market capitalization was $6.24 billion amid pre-market trading on December 1, 2022. That's up from about $4.78 billion when Nutanix M&A rumors surfaced in October 2022.

Key Nutanix shareholders include Bain Capital, which invested $750 million in Nutanix in 2020. Also, activist hedge fund Legion Partners Asset Management has a less than 1% stake in the company, The Wall Street Journal noted in October 2022.

HPE: Current Revenues, Cash on Hand

Meanwhile, HPE's business appears to be performing reasonably well despite potential economic headwinds. The evidence: HPE's revenue was $7.9 billion in Q4 of 2022, up 7% from the corresponding quarter last year, the company ($HPE) disclosed on November 29. The revenue figures represented a company record, HPE said.

HPE had cash on hand of $4.45 billion as of July 2022, according to MarketWatch, and the company's overall valuation is $19.8 billion as of December 1, 2022.

Meanwhile, big private equity firms such as Thoma BravoInsight Partners and Vista Equity Partners also have the financial war chests large enough to buy Nutanix.

Still, we don’t know which firms -- if any -- interested in Nutanix, and it’s unclear if the software company will actually be acquired.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.