HP acquired Autonomy in 2011 for $10.3 billion and, in late 2012, said it was writing down $8.8 billion of the deal. HP blamed Autonomy’s management team for the majority of the write-down and accused the team of “accounting improprieties, misrepresentations and disclosure failures” that inflated the value of the company.
“These efforts appear to have been a willful effort to mislead investors and potential buyers, and severely impacted HP management’s ability to fairly value Autonomy at the time of the deal,” said HP in a statement.
HP faces several lawsuits from shareholders who are accusing the company of having ignored warning signals in its decision to buy Autonomy. Autonomy’s founder, Michael Lynch, denied the mismanagement charges and accused Hewlett-Packard of mishandling the acquisition. Lynch left Autonomy in May last year and was replaced by former Microsoft executive Robert Youngjohns.
Youngjohns, who joined HP Autonomy a few weeks before news of the write-down broke, noted that the company “had some issues that are being dealt with, but we’re putting that behind us and looking forward.”
As part of its makeover, Youngjohns said he introduced three goals for Autonomy’s roughly 3,000 employees: to be customer-focused and innovative, and to leverage and integrate into HP’s other technologies. “There have been a lot of questions about Autonomy’s long-term future,” Younjohns said “And we’re turning it around by executing in a solid steady way and not getting obsessed with image.”