Networking

3Com sold in $2.2 billion cash deal

Networking pioneer 3Com, the dominant player prior to being supplanted by Cisco Systems, has been acquired by a private equity firm in a $2.2 billion cash deal.

Networking pioneer 3Com, the dominant player prior to being supplanted by Cisco Systems, has been acquired by a private equity firm in a $2.2 billion cash deal on Friday.

Private-equity firm Bain Capital will take a stake of more than 80% in 3Com, while networking behemoth Huawei Technologies of China will purchase the rest. At $5.30 a share, it is a 44% premium to 3Com's closing price on Thursday.

Admittedly, even that is a far cry from the heights of 3Com's shares in the 1990s.

Excerpt from the Wall Street Journal:

Huawei was crucial to Bain securing 3Com. That is because the Chinese company has a noncompete agreement with 3Com, stemming from the previous joint venture. That deals lapses in 2008. Should the buyer have been a company such as Nortel Networks Corp. - which was involved in the auction, people close to the deal say - it would have faced competition from Huawei in short order. That would be a daunting prospect given that Huawei is also an H3C customer, responsible for 30% of its revenue.

Frank Dzubeck, a networking consultant, summed up sentiments in the IT industry when he told the Journal, "3Com has been on one of the industry's longest death spirals."

Do any of you still use 3Com's networking equipment?

About

Paul Mah is a writer and blogger who lives in Singapore, where he has worked for a number of years in various capacities within the IT industry. Paul enjoys tinkering with tech gadgets, smartphones, and networking devices.

2 comments
paulmah
paulmah

Do any of you still use 3Com's networking equipment?

hatimamen
hatimamen

Yes we do Here in Vodafone Egypt, in on of our old branches we're still using its Edge Switches 3300 series, among other 3Com series, but there're thinking about replacing it soon.