[Infowarrior] - HP to Acquire 3Com for $2.7 Billion

[Richard Forno]

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
http://www.hp.com/hpinfo/newsroom/press/2009/091111xa.html

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.

Audio webcast

This afternoon HP will conduct an audio webcast for financial analysts  
and stockholders to discuss HP’s agreement to acquire 3Com.

Audio webcast for financial analysts and stockholders: 5 p.m. ET / 2  
p.m. PT, hosted by Dave Donatelli, executive vice president and  
general manager of Enterprise Servers and Networking at HP. Access the  
live audio webcast at www.hp.com/investor/hpwebcast.