PALO ALTO, Calif. – Hewlett Packard Co. (HP) has announced that it will acquire Aruba Networks, a provider of Wi-Fi network gear, for approximately $2.7 billion.
The deal will combine Aruba’s wireless mobility solutions with HP’s switching portfolio, allowing the company to offer next-generation mobile networks, according to a company press release.
“Enterprises are facing a mobile-first world and are looking for solutions that help them transition legacy investments to the new style of IT,” HP Chairman, President and CEO Meg Whitman says. “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.”
With 1,800 employees, Sunnyvale, Calif.-based Aruba Networks reported revenue of of $729 million in fiscal 2014. The firm also reported compound annual revenue growth (CAGR) of 30 percent in the past last five years.
This new combined organization will be led by Aruba Networks CEO Dominic Orr, and Chief Strategy and Technology Officer Keerti Melkote will lead the combined HP/Aruba Networks organization. They will report to Antonio Neri, leader of HP Enterprise Group.
“Together with HP, we have a tremendous opportunity to become an even greater force in enterprise mobility and networking,” Orr says. “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.”
Analysts from Cantor Fitzgerald say the planned acquisition complements HP’s network portfolio, although the firm believes HP’s capital would be better spent on cloud and Big Data software-related vendors, Wall Street Journal reports.
Meanwhile Mizhuo Securities USA analysts predicts that the deal will unlikely solve growth issues within HP despite Aruba Networks’ strong revenue growth. Rather, the analysts estimate that Aruba’s potential revenue contribution would represent less than 2% of H-P Enterprise’s overall revenues.
The transaction is expected to close in the second half of HP’s fiscal year 2015.
