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Hewlett-Packard’s Cloud Lag Spurring Lowest Valuation: Real M&A

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Hewlett-Packard Co., which paid the highest multiple on record for a computer company six months ago, now needs to spend as much as double the historical valuation for software takeovers to catch up in cloud computing.

Red Hat Inc., Informatica Corp. and Tibco Software Inc., which Goldman Sachs Group Inc. says may be targets as Hewlett-Packard adds software, trade as high as 42 times earnings before interest, taxes, depreciation and amortization. That compares with the median 18 times for software and Internet acquisitions in the last five years, according to data compiled by Bloomberg. Leo Apotheker, 57, started as chief executive officer in November after an interim CEO paid a record 325 times Ebitda for 3Par Inc. following a bidding war with Dell Inc., the data show.