Tuesday, 2 February 2010

HP to Acquire Networking Giant 3Com for $2.7 Billion HP to "Transform the Networking Industry" and Bring Next-gen Infrastructure

A late afternoon update just came our way stating that HP is going to
acquire network giant 3Com in an all-cash deal valued at $2.7 billion,
or $7.90 a share. Although the deal is yet to be approved by 3Com's
stockholders and to get government approval, sources have confirmed that
the boards of directors of both companies have sealed an agreement to
complete the transaction sometime in the first half of next year.
The buyout is supposedly going to consolidate HP's involvement in the
server and networking business that would enable customers to build a
next-generation network infrastructure that supports customer needs from
the edge of the network to the heart of the data center, the company
has announced.
As for 3Com, CEO Bob Mao thinks that their extensive product line and
innovative technology together with HP's breadth and scale will expand
our global opportunity.
No word if HP's market consolidation will be followed by a cost saving
policy that would lead to layoffs, but we'll have to assume it's a good
twist considering that Cisco (3Com's usual rival) has been involved in
a storage deal with EMC as of late.
Check out the press release below!
HP to Acquire 3Com for $2.7 Billion
Will create networking industry powerhouse with a proven, edge-to-data
center set of solutions and global reach
PALO ALTO, Calif., and MARLBOROUGH, Mass., Nov. 11, 2009
HP and 3Com Corporation (NASDAQ: COMS) ( �3Com �) today announced that
they have entered into a definitive agreement under which HP will
purchase 3Com, a leading provider of networking switching, routing and
security solutions, at a price of $7.90 per share in cash or an
enterprise value of approximately $2.7 billion. The terms of the
transaction have been approved by the HP and 3Com boards of directors.
This combination will transform the networking industry and underscore
HP s next-generation data center strategy built on the convergence of
servers, storage, networking, management, facilities and services. The
resulting business outcome will help customers simplify the network,
deploy a unique and innovative edge-to-core network fabric for the
enterprise and improve IT service delivery capabilities, all delivered
with best-in-class price-performance.
�Companies are looking for ways to break free from the business
limitations imposed by a networking paradigm that has been dominated by
a single vendor, � said Dave Donatelli, executive vice president and
general manager, Enterprise Servers and Networking, HP. �By acquiring
3Com, we are accelerating the execution of our Converged Infrastructure
strategy and bringing disruptive change to the networking industry. By
combining HP ProCurve offerings with 3Com s extensive set of solutions,
we will enable customers to build a next-generation network
infrastructure that supports customer needs from the edge of the network
to the heart of the data center. �
�Our extensive product line and innovative technology together with HP
s breadth and scale will expand our global opportunity, � said Bob Mao,
chief executive officer, 3Com. �3Com s networking products are based on
a modern architecture which has been designed to offer better
performance, require less power and eliminate administrative complexity
when compared against current network offerings. Our products are
enterprise proven and widely deployed in the world s largest banks,
manufacturers, Internet service providers, public utilities and retailers. �
The acquisition of 3Com will dramatically expand HP s Ethernet switching
offerings, add routing solutions and significantly strengthen the
company s position in China " one of the world s fastest-growing
markets " via the H3C offerings. In addition, the combination will add
a large and talented research and development team in China that will
drive the acceleration of innovations to HP s networking solutions.
3Com also brings to HP best-of-breed network security capabilities
through its TippingPoint portfolio. For the past four years,
TippingPoint has been the leader in Gartner s �Magic Quadrant � in its
evaluation of leading network security products. Approximately 30
percent of the Fortune 1000 companies have already deployed TippingPoint
intrusion prevention systems.
�We are confident that we can run our entire global business of
300,000-plus employees, including our next-generation data centers,
entirely on the new HP networking solutions, � said Randy Mott,
executive vice president and chief information officer, HP. �Based on
our experience and extensive testing of 3Com s products, we are planning
to undertake a global rollout within HP as soon as possible after the
completion of the acquisition. �
Under the terms of the merger agreement, 3Com stockholders will receive
$7.90 for each share of 3Com common stock that they hold at the closing
of the merger. The acquisition is subject to customary closing
conditions, including the receipt of domestic and foreign regulatory
approvals and the approval of 3Com s stockholders. The transaction is
expected to close in the first half of calendar 2010.
HP anticipates that the transaction will be slightly dilutive to fiscal
2010 non-GAAP earnings.
Post a Comment

Analytics and Statistic

Blog Archive