HP to acquire 3Com for $2.7 billion
Hewlett-Packard and 3Com Corporation have entered into a definitive agreement under which HP will purchase 3Com 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 both companies' boards of directors.
November 12, 2010 --Hewlett-Packard (HP) and 3Com Corporation announced that they have entered into a definitive agreement under which HP will purchase 3Com, a provider of networking switching, routing and security platforms, 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.
HP expects that the combination of companies 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 companies say the resulting business outcome will help customers simplify the network, while deploying and edge-to-core network fabric for the enterprise and improving IT service delivery capabilities.
“By acquiring 3Com, we are accelerating the execution of our converged infrastructure strategy and bringing disruptive change to the networking industry," says Dave Donatelli, executive vice president and general manager, Enterprise Servers and Networking, HP. "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.”
The acquisition of 3Com will expand HP’s Ethernet switching offerings, add routing solutions and significantly strengthen the company’s position in the fast growing Chinese market 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.
“Our extensive product line and innovative technology together with HP’s breadth and scale will expand our global opportunity,” comments 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.”
3Com also brings to HP network security capabilities through its TippingPoint portfolio. For the past four years, claims 3Com, 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, maintains 3Com.
“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,” says 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.
3Com plans to file with the Securities and Exchange Commission and furnish to its stockholders a proxy statement in connection with the proposed merger. The proxy statement will contain important information about the proposed merger and related matters. Investors and stockholders are urged to read the proxy statement carefully when it becomes available. Investors and stockholders will be able to obtain free copies of the proxy statement and other documents filed with the SEC by 3Com through the website maintained by the SEC at www.sec.gov, and from 3Com by contacting Investor Relations by mail at 3Com Corporation, 350 Campus Drive, Marlborough, MA 01752-3064 Attention: Investor Relations, by telephone at +1 508 323 1198, or by going to 3Com’s Investor Information page on its corporate website at www.3com.com (click on “Investor Information”, then on “SEC Filings”).
3Com and HP and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from 3Com stockholders in connection with the acquisition. Information about HP’s directors and executive officers is set forth in HP’s proxy statement on Schedule 14A filed with the SEC on January 20, 2009 and HP’s Annual Report on Form 10-K filed on December 18, 2008. Information about 3Com’s directors and executive officers is set forth in 3Com’s proxy statement on Schedule 14A filed with the SEC on August 7, 2009 and 3Com’s Annual Report on Form 10-K filed on July 27, 2009. Additional information regarding the interests of participants in the solicitation of proxies in connection with the merger will be included in the proxy statement that 3Com intends to file with the SEC.
On the Web:www.hp.com