Hewlett Packard Enterprise is a lot lighter now than it was a year ago.
The data center technology company said Friday that it closed an $8.8 billion deal in which it spun off its software business to Micro Focus, an IT software company based in the United Kingdom.
HPE first announced the deal last September, during which CEO Meg Whitman pitched it as a big step to help HPW be “an even stronger company, well positioned to the future.”
Here are four reasons why the deal is important.
1. It seems to have boosted HPE’s stock, at least for the day.
HPE’s (HPE) shares were up 1.7% to $14.24 at 12:10 PM PST after the company said the deal closed. The enterprise hardware maker needs any help it can get to lift its stock price, which has been falling ever since the beginning of this year. HPE’s shares have plummeted nearly 40% since the beginning of January as sales of its servers and other data center gear keep declining each quarter as more companies continue to buy on-demand computing resources from businesses like Amazon (AMZN), Microsoft (MSFT), and Google (GOOG).
Still, HPE said that its stock price is actually performing better because of the two spin offs it did this year.
“We have spun off two companies, which have each included the distribution of 50.1% of the new company’s stock to our shareholders,” An HPE spokesperson wrote to Fortune in an email. “If you owned a share of HPE on Dec 31 ($23.20) then that share is worth about $25.75 today. That is a little better than a 10% increase.”
2. It’s one more thing Meg Whitman can check off her to-do list.
Whitman has been trying to nurse HPE back to health through multiple major initiatives including splitting the company from its PC and printer sibling HP Inc. (HPQ) in November 2015.
At the beginning of 2017, HPE said it would buy data center hardware startup Simplivity for $650 million, followed by the $1 billion purchase of storage hardware startup Nimble Storage in March.
These big transactions are intended to revive HPE amid a rapidly changing technology landscape, but they have yet to make a big impact with HPE missing its sales projections for four straight quarters, as Bloomberg News noted.
Whitman has stated multiple times that she doesn’t intend to leave HPE until she believes the company is healthy enough, although she was recently negotiating to become CEO of ride-sharing company Uber.
3. It closes the books on HPE’s disastrous purchase of Autonomy
One of the software units Micro Focus is inheriting from HPE is the Autonomy software unit that HPE, then led by CEO Leo Apotheker, bought in 2011 for $11.1 billion. Analysts criticized the deal as being overpriced, and HPE eventually took an $8.8 billion writedown in 2012.
4. It makes Micro Focus the biggest tech company in the United Kingdom
By acquiring HPE’s software business—which includes data analytics, security, and application monitoring softare—Micro Focus has overtaken business software company Sage Group as the U.K.’s biggest tech company, according to Bloomberg News.
And Micro Focus wants to continue to get bigger.
“Our funding ability has increased now that we are bigger” Micro Focus executive chairman Kevin Loosemore told Bloomberg News. “There is no practical cap in terms of size of future deals.”
Update: September 1, 2:30 PM PST with HPE statement on its stock.