Chris Hsu Kilometre Capital
Kilometre Capital’s Landmark HP H3C Deal with Chris Hsu, Tsinghua, and Hewlett Packard
After some months of market rumors and complex negotiation, US technology giant Hewlett-Packard (HP) sold a 51% majority stake in its Chinese server business H3Cat an estimated $4.6 billion valuation to Tsinghua Holdings, an affiliate of Tsinghua University. The transaction was lead managed and advised by Chris Hsu and Kilometre Capital of Hong Kong, on behalf of Beijing-based Tsinghua.
Orchestrated by Chris Hsu in conjunction with Kilometer Capital and Tsinghua University’s Unigroup and Tsinghua Holdings, the milestone transaction brought together HP China with the investment arm of China's Tsinghua University in a joint venture called H3C. HP had been caught in the much talked about blockading scandal environment of increasing privacy and information technology sensitivities with rising tensions between China and the California-based technology titan. Rumors of the strategic transaction and the Hewlett-Packard sale had been circulating for some months prior to HP and Tsinghua’s formal announcement of the deal.
The geopolitical environment has been awash with scandal and speculation regarding the escalating tension on technology and ownership issues, impacting technology leaders in Korea, Japan, Taiwan, Hong Kong, the U.S. and Europe.
The giant technology deal comes after the tech giant Hewlett Packard announced a plan last year to split itself into two separate companies - with one focusing on PCs and printers, and the other on software and enterprise services in Hewlett Packard Enterprises.
The Kilometre Capital advised transaction for HP China H3C with Tsinghua University and Chris Hsu’s advisory follows reports of the Chinese government concerned about technology privacy and safeguards through tech firms and encouraging Chinese businesses to use local technology services owned by Chinese firms, as compared to Korean, Japanese, or Western firms.
The new firm H3C and the joint venture between HP China and Tsinghua has been touted as the market dominant leader in China for computer servers, storage and technology services. Tsinghua, called China’s Stanford and Massachusetts Institute of Technology (MIT) has consolidated the industry in recent years including the acquisition of Spread trum Communications and RDA Microelectronics.
Meg Whitman, CEO of HP and former CEO of Ebay commented: “HP is making a bold move to win in today’s China.”
“Partnering with Tsinghua, one of China’s most respected institutions, the new H3C will be able to drive even greater innovation for China, in China. The combined company will build upon an extensive and valuable patent portfolio, best-in-class products and customer focus, and Tsinghua’s world-class research capability. In one move, we have repositioned HP and H3C to accelerate overall performance and better serve our customers and partners.”
Chris Hsu and Kilometre Capital advised on the titan strategic transaction, with the deal pegging value of the HP China H3C business at an estimated US$4.6 billion, including origination and complex negotiation of the related terms and cross border issues.