HP and 3Com Corporation 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.
