HP buys Aruba Networks in $3bn deal
HP looks to expand its enterprise networking portfolio with purchase of Wi-Fi equipment specialist Aruba
HP is to buy Wi-Fi hardware and services company Aruba in a deal that has been valued by Aruba at $3bn. The deal comes ahead of a plan by HP CEO Meg Whitman to spin off the PC and printers business in order to focus the company squarely on the enterprise - including servers, software, services and cloud computing.
"Together, HP and Aruba will deliver converged wired and wireless solutions, leveraging the strong Aruba brand," claimed the two companies in a statement. Aruba will become a subsidiary of HP, led by the company's current CEO Dominic Orr and co-founder Keerti Melkote.
The Aruba acquisition is intended to bolster HP's networking equipment and services portfolio, on the one hand, while improving its range of offerings in enterprise mobility on the other.
Part of the rationale for Aruba, according to the statement, is to leverage HP's presence in major organisations, as well as HP's channel to better penetrate the small- and medium-sized business sector. The transaction is expected to close between May 2015 and October 2015, depending on shareholder approval.
Aruba has some 1,800 employees and reported revenues of $729m in the last financial year. In its first quarter of the current financial year, it boasted a revenue rise of 29 per cent to $207.8m.
HP shareholders will no doubt have their fingers crossed, given the company's recent history of multi-billion-dollar mergers and acquisitions.
Its 2011 $11.7bn purchase of search technology company Autonomy was marred by accusations of accounting fraud and HP was forced to write-off 80 per cent of its value. HP's 2008 $13.9bn purchase of services giant EDS, meanwhile, was also ill-timed, coming just as the global financial crisis was closing down IT outsourcing budgets, which have continued to be depressed.