HP’s networking and security business got a bit larger on Monday with the close of its bid to acquire networking vendor 3Com.
HP (NYSE: HPQ) is paying $2.7 billion, or $7.90 per share, for 3Com.
HP announced its intention to acquire 3Com in November 2009. With 3Com, HP gains a number of key assets in terms of networking, security and geography.
3Com has a portfolio of networking products, including the Data Center Core Switch, that attracted the attention of HP. During the November press conference announcing the 3Com acquisition, Marius Haas, the senior vice president and general manager of HP’s ProCurve Networking division, noted that HP did not have a core networking switch. With the acquisition of 3Com’s products, Haas said that HP would have an edge-to-core networking portfolio.
As part of the 3Com acquisition, HP also acquires 3Com’s Tipping Point security division. In addition to security hardware, Tipping Point operates the Zero Day Initiative (ZDI) security research service, which pays security researchers for disclosing vulnerabilities. ZDI also runs the popular Pwn2own live hacking event, which pits researchers in a race to find un-patched vulnerabilities in mobile operating systems and Web browsers.
In terms of geography, a key part of 3Com’s value is its H3C division, which operates in China. H3C originally was a joint venture with Chinese networking vendor Huawei, but 3Com now owns a majority stake.
3Com’s Chinese assets scuttled a previous attempt to acquire the company. In 2008, the U.S. government shut down Bain Capital’s proposed $2.2 billion buyout of 3Com by concerns about the Chinese division.
From a timing perspective, HP’s acquisition of 3Com comes as competition in the networking market is heating up. In February, Cisco announced that it was severing its certified channel partnership with HP, in part because the two firms have increasingly become competitors in the networking space.