Shifting its strategic focus away from computer equipment manufacturing towards wireless networking technologies, Hewlett-Packard (HP) agreed Monday to purchase Wi-Fi gear maker Aruba Networks, Inc. in a cash transaction valued at $2.7 billion.
Monday’s deal, which follows on HP’s announced plan last October to separate its PC and printer production unit from its corporate hardware and services business, is said to be the biggest acquisition for HP in three years. October’s spinoff was designed to help HP capitalize on the growth potential of network service operations that got off the ground in 2010 with HP’s $2.7 billion acquisition of 3Com Corp. Sources believe HP’s purchase of Aruba—a producer of wireless networking access point hardware and software used by hotels, universities and shopping malls—will boost that business further as smart phones, tablet PCs and other web-connected wireless devices continue to proliferate.
Under the terms of the deal, HP will pay Aruba $24.67 per share in cash which represents a 34% premium over Aruba’s closing share price on February 24. Contingent on receipt of regulatory approvals, the transaction is slated for completion by October 31. HP Chairwoman Meg Whitman predicted that, “by combining Aruba’s world class 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.”