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HP ventures into data centers via 3Com

Posted: 18 Nov 2009 ?? ?Print Version ?Bookmark and Share

Keywords:HP 3Com merger? network? data center?

Hewlett-Packard and 3Com Corp. they have entered into a definitive agreement for HP to purchase 3Com, provider of networking switching, routing and security solutions. The purchase price is $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 VP 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, CEO, 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 Chinaone 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 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 network security products. Approximately 30 percent of the Fortune 1,000 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 VP 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 1H 10.

HP anticipates that the transaction will be slightly dilutive to fiscal 2010 non-GAAP earnings.





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