By Manikandan Raman: Subscribe to Manikandan's RSS feed
August 23, 2010 12:14 PM EDT
Hewlett-Packard (HP) launched a rival offer to buy storage company 3Par Inc., for $24 a share, trumping Dell's offer of $18 a share, a move that will strengthen HP's corporate data-center business.
HP's offer has an enterprise value of $1.6 billion, while Dell had earlier agreed to buy 3Par for $1.15 billion.
HP's offer represented a premium of 33 percent to 3Par's closing price on Aug. 20 and as well as Dell's offer of $18 apiece. Dell's Aug. 16 offer was a hefty 86 percent premium to Aug. 13 closing price of 3Par.
The acquisition will bolster HP to compete with Dell and International Business Machines Corp. (IBM) in the complex computer systems and technology services market that offers higher profit margins than the traditional desktop and laptop PCs market.
"We've seen great momentum with our Converged Infrastructure strategy, and 3ar accelerates that strategy, particularly in cloud and scale-out markets." Dave Donatelli, executive vice president and general manager, Enterprise Servers, Storage and Networking, HP said in a statement.
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The addition of 3Par's storage architecture will accelerate HP's Converged Infrastructure strategy, which provides customers with an unmatched portfolio of intellectual property across storage, server and networking solutions. The combination will bolster HP's storage offerings and diversify its portfolio across key growth markets.
California-based 3Par, founded in 1999, builds high-end systems that help companies store and manage their data efficiently, using features such as dynamic tiering and thin provisioning, in multi-tenant cloud-computing environments.
HP's proposal is not subject to any financing contingency and has been approved by HP's board of directors. Once approved by 3Par's board, HP expects the transaction to close by the end of the calendar year.
HP, which makes PCs, servers, storage devices, printers, and networking equipment, is on a acquisition spree and last week said it will acquire security and compliance company Fortify Software for undisclosed sum. Recently, HP also completed big-ticket acquisitions of 3Com and Palm.
Shares of California-based HP closed at $39.85 Friday on the NYSE, while 3Par stock ended Friday's trading at $18.04. In pre-market, 3Par was trading higher than HP' offer at $24.86, up 37.8 percent from Aug 20.
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