Yup: HP’s buying Aruba for about $3B

It’s true: Hewlett-Packard is buying Aruba Networks and its campus Wi-Fi expertise for about $2.7 billion, exclusive of cash, both companies said early Monday.

The per-share price is $24.67 in cash.

From the press release:

Together, [company]HP[/company] and [company]Aruba[/company] will deliver next-generation converged campus solutions, leveraging the strong Aruba brand.  This new combined organization will be led by Aruba’s Chief Executive Officer Dominic Orr, and Chief Strategy and Technology Officer, Keerti Melkote, reporting to Antonio Neri, leader of HP Enterprise Group.

News of the deal leaked last week and was first reported by Bloomberg.

This purchase should give HP more ammo to go after rival Cisco in the WLAN market. The HP and Aruba boards have approved the deal, which is expected to close between May and October of this year.

It also adds another level of complexity for HP which, as it adds Aruba to the mix, is dividing itself into two companies in what has been described as the biggest corporate break up in history.  The two entities at the end of the process will be HP Enterprise — converged hardware, cloud etc. and presumably Aruba’s new home and the HP Co.,the new home for all those HP PCs and printers.

HP reportedly mulling purchase of Aruba Networks

Well, it’s been a while since Hewlett-Packard made a really big acquisition but it sounds like the IT giant is shaking off the post-Autonomy jitters: it’s weighing a purchase of Aruba Networks, according to Bloomberg.

[company]Aruba Networks[/company], Sunnyvale, Calif.,  provides Wi-Fi access gear at big indoor and outdoor venues — malls, hotels, university campuses,  conference centers etc.

The move would give [company]HP[/company], which already offers its own “converged campus networking” gear, a bigger footprint in wireless mobile, a hot market, that could grow even hotter as more businesses and consumers use Wi-Fi to take some of the pressure off overloaded cellular networks. This acquisition would be reminiscent of Cisco’s purchase of Meraki a little over two years ago for $1.2 billion.

Aruba is one of the leaders in enterprise Wi-Fi so an HP purchase would give it more ammo to go after rival [company]Cisco[/company] in the WLAN market, according to Gigaom’s Kevin Fitchard.

Aruba Networks has a market cap of about $2.42 billion and trailing-twelve month revenue of $745 million. HP had no comment on the report; Aruba Networks has not yet responded to a request for comment.

Aruba shares rose on the report — they were up 22 percent at one point Wednesday while HP shares fell about 10 percent. Since HP’s controversial $11 billion buy of Autonomy in 2011, CEO Meg Whitman has said the company will look at smaller, more targeted acquisition targets; she also noted on this week’s first quarter earnings call that HP was looking to grow its networking business..

ARUN Price Chart

ARUN Price data by YCharts

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