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HP to Acquire Aruba Networks for $3B

HP is acquiring wireless networking firm Aruba Networks for $3 billion, the largest deal for the PC maker in some three years.

As part of the agreement, HP will acquire Aruba for $24.67 per share in cash. The equity value of the transaction is approximately $3 billion, and net of cash and debt roughly $2.7 billion.

The purchase will give HP’s networking business a much-needed boost as the popularity of mobile devices continues to soar.

Meg Whitman
Meg Whitman

“Enterprises are facing a mobile-first world and are looking for solutions that help them transition legacy investments to the new style of IT,” said HP CEO Meg Whitman. “By combining Aruba’s world-class wireless mobility solutions with HP’s leading switching portfolio, HP will offer the simplest, most secure networking solutions to help enterprises easily deploy next-generation mobile networks.”

Founded in 2002, Sunnyvale-based Aruba’s core products are access points (APs), mobility controllers, and network management software through its Airwave Management Platform product. The firm’s technology is used by hotels, universities and shopping malls.

HP said the acquisition will accelerate revenue growth and strengthen the financial performance of the combined HP Networking business. It will also, according to the company, create a leading competitor in the growing campus networking sector.

“Together with HP, we have a tremendous opportunity to become an even greater force in enterprise mobility and networking,” Aruba CEO Dominic Orr said. “This transaction brings together Aruba’s best-of-breed mobility hardware and software solutions with HP’s leading switching portfolio. In addition, Aruba’s channel partners will have the opportunity to expand their businesses with HP offerings. Together, we will build on Aruba’s proven ‘customer first, customer last’ culture, creating an innovative, agile networking leader ideally positioned to solve our customers’ most pressing mobility, security and networking challenges.”

HP is expecting to increase its earnings in the first full year following the deal’s closure Oct. 31. The deal must receive the green light first from Aruba shareholders and then from regulators.

Sunnyvale-based Aruba has approximately 1,800 employees. The company had revenues of $729 million in fiscal 2014, and has reported compound annual revenue growth of 30 percent over the last five years.

About the author

Jennifer Cowan

Jennifer Cowan is the Managing Editor for SiteProNews.

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