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HP announced a definitive agreement acquire Aruba Networks, a leading provider of network access solutions for the mobile enterprise, for $24.67 per share in cash. The equity value of the transaction is approximately $3.0 billion, or net of cash and debt approximately $2.7 billion.
Aruba is a Sunnyvale-based industry leader in wireless networking with 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.
Aruba boasts a highly regarded innovation engine and specialized sales, marketing and channel model, complementing HP's networking business and go-to-market breadth. Together, HP and Aruba plan to 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. With this move, HP intends to deliver both the innovation and global delivery and services offerings to meet customer needs worldwide.
The shift to mobile, enterprise networking needs exceeds the capabilities of legacy infrastructure. At the same time, organizations are shifting rapidly to mobility-centric workplaces for their employees, guests, customers, and students. The next-generation 802.11ac Wi-Fi standard is critical in enabling this trend. This new technology will support the faster speeds and access to cloud applications that end-users expect. Enterprises need comprehensive, integrated and secure networking solutions to help them transition legacy systems to the wireless edge. Today's announcement directly addresses these market trends.
HP and Aruba believe that by combining complementary product portfolios and go-to-market approaches they will be able to accelerate revenue growth and strengthen the financial performance of the combined HP Networking business, creating a leading competitor in the $18 billion and growing campus networking sector.
The transaction is expected to close in the second half of HP's fiscal year 2015, subject to Aruba stockholder approval, regulatory approvals in the US and other countries as well as other customary closing conditions.
Keywords: Wireless Mobility, Wired Switching, Mobile Enterprise, Network Access Solutions, Cloud Applications, Campus Solutions, ARC Advisory Group.