Mon, Oct. 31, 3:57 PM
- Brocade Communications (NASDAQ:BRCD) is up 22.3% and hanging right at 52-week high range after news that it's in talks to sell itself and getting close to the end of that process.
- A deal could be announced this week, Bloomberg reports, and one of the interested parties is reportedly Broadcom (AVGO +0.7%), which could be interested in supplementing its switch-chip business with Brocade's networking gear. Broadcom CEO Hock Tan has said he's interested in acquisitions.
- Such a deal might allow for better competition against much bigger rival Cisco Systems (CSCO +0.4%). "A purchase by Broadcom (Avago) would be a strategic move by Broadcom to vertically integrate in an IP switching and routing market that has increasingly moved to merchant silicon," notes Stifel analyst Aaron Rakers.
- He's maintained a Hold rating and $10 price target (the boost today has put Brocade at $10.63). He doesn't know any inside information about activity around Brocade this week but notes that for years, talk has persisted that Brocade might sell itself to suitors like H-P (NYSE:HPQ), Oracle (NASDAQ:ORCL) or IBM (NYSE:IBM).
- With current net debt (about $440M) and at $11/share, Brocade would come at about a $4.9B enterprise value, 7.3 times EBITDA, he says.
Mon, Sep. 12, 5:11 AM
- HP (NYSE:HPQ) is getting a lot bigger. The personal computer and printing giant is buying Samsung's (OTC:SSNLF) printing business for $1.05B, in a move that will give it 6,000 new employees, thousands of new technology patents and a bigger presence in Asia.
- The acquisition is expected to add to HP's earnings in its full year after closing.
- Samsung will also buy $100M-$300M worth of HP shares on the open market once the deal is through.
Mon, Jun. 20, 10:38 AM
- Open Text (OTEX +2.4%) agrees to acquire customer communications software management assets from HP (HPQ +0.9%) for ~$315M.
- OTEX says the deal includes HP Extream, HP Output Management, HP TeleForm and HP LiquidOffice, which are collectively used to manage customer communications, process automation and document delivery.
- OTEX expects the acquired businesses to generate $110M-$125M of annualized revenue but be immediately accretive to earnings and on the OTEX operating model by the end of Q1 FY2017.
Mon, Apr. 18, 9:42 AM
- Open Text (OTEX +0.7%) has agreed to acquire customer experience software assets from HP (HPQ -0.5%), for about $170M total.
- The deal includes content management solution HP TeamSite, HP MeediaBin, HP Qfiniti, HP Explore, HP Aurasma and HP Optimost. Most of the assets complement Open Text's Customer Experience Management and Cloud offerings.
- The Customer Experience software business is expected to generate $85M-$95M of annualized revenues and be immediately accretive. The deal should close in Q4.
- Now read Open Text - An Outstanding Vision In Conservative Clothing »
Oct. 27, 2015, 10:51 AM
- Cisco (CSCO -0.1%) is buying Lancope, a security analytics software firm that provides tools for analyzing network traffic, identifying and tracking apps, viewing global threat intelligence, and identifying the source of a security event. The company is paying $452.5M in cash and assumed equity awards, and will also provide retention incentives.
- Cisco: "With Lancope, Cisco's portfolio of security solutions adds an additional capability of network behavior analytics that extends protection further into the network." Lancope's software complements Cisco's existing security appliance and software offerings, and fits with the company's strategy of embedding security features throughout its networking product line.
- Also being acquired: ParStream, a German provider of a distributed analytics database for IoT-related data. Terms are undisclosed.
- Cisco: "Using innovative compression and indexing capabilities, ParStream’s technology helps customers access data faster and at scale, rapidly analyzing and filtering billions of records and getting information to the business in near real-time. This acquisition complements Cisco’s current data and analytics portfolio, improving our ability to provide analytics at the edge of the network, where data is increasingly being generated and in huge volume."
- The ParStream acquisition follows the June launch of Cisco's IoT System, which aims to deliver an end-to-end networking solution (featuring hardware, software, and services) for Web-connected embedded devices. CRN observes ParStream could compete with HP's (NYSE:HPQ) Vertica analytics database.
- Recent Cisco acquisitions: OpenDNS (DNS security software/services, $635M), MaintenanceNet (cloud contract-management software, $139M), Neohapsis (security advisory services), Embrane (virtual appliance management software).
Oct. 21, 2015, 1:46 PM
- Japanese security software firm Trend Micro (OTCPK:TMICF) is acquiring HP's (HPQ -0.4%) TippingPoint security appliance unit for $300M. The deal is expected to close by the end of calendar Q4.
- Reuters reported last month HP was exploring a sale of TippingPoint (has faced stiff competition from Cisco, Check Point, Palo Alto Networks, and others) amid a strategic review of its product lines ahead of the company's Nov. 1 breakup. Reuters' sources suggested the sale price could be in the $200M-$300M range.
- TippingPoint was obtained by HP via the $2.7B 3Com acquisition. 3Com bought TippingPoint in 2005 for $442M.
Oct. 12, 2015, 6:32 PM
- Thanks to VMware's (NYSE:VMW) 8.1% drop in regular trading, the official value of Dell's buyout offer for EMC ($24.05/share in cash + 0.11 shares of a VMware tracking stock) fell from $33.15/share to $32.00/share. However, that's still 13% above EMC's $28.35 closing price.
- Part of the discount likely stems from expectations VMware tracking stock will trade at a discount to its regular shares, given the tracking stock will have no voting rights or access to dividends (should VMware begin paying one). Nonetheless, some M&A arb traders see a compelling opportunity, assuming the tracking stock trades at a moderate discount.
- There's speculation another tech giant could bid for EMC during its go-shop period. But there haven't been any formal reports of buyout interest, and EMC's current price suggests markets are skeptical of a rival bid arriving. HP (NYSE:HPQ) used today's news to trash-talk EMC/Dell - "Two of our largest competitors are attempting a highly distracting, multi-year merger, just as we are launching two new, focused companies." - while Dell server/networking rival Cisco (NASDAQ:CSCO) affirmed its partnership with EMC.
- Meanwhile, several analysts defended VMware as shares tumbled thanks to the EMC/Dell news and VMware's Q3 pre-announcement - revenue and EPS are expected to top estimates, but billings growth of 3% Y/Y fell short of expectations. Cowen's Gregg Moskowitz: "While we believe this deal certainly could have been better structured (i.e. there is no collar on VMW's stock), and the billings were disappointing, the selloff nonetheless looks clearly overdone, as we expect no meaningful impact to VMW's strategy or operations."
- MKM's Kevin Buttigieg: "At the current intraday price of $71, VMW is 13x CY16 consensus EPS excluding net cash of $13/share, a level we think presents tremendous value, though likely requires patience given uncertainty around the Dell deal." On this morning's conference call, departing EMC CEO Joe Tucci suggested Dell is looking to up its VMware stake over time.
Sep. 2, 2015, 5:27 PM
- Ahead of the Nov. 1 spinoff of its PC and printing ops, HP (NYSE:HPQ) has named Enrique Lores, currently the head of its EMEA PC business, its new printing division chief. He replaces Stephen Nigro, who will now lead a newly-created 3D printing unit. Various lower-level executive positions have also been reshuffled.
- Both Lores and Nigro will report to Dion Wiesler, set to be the CEO of the HP Inc. PC/printing spinoff. The shakeup comes a month after HP reported its printing revenue fell 9% Y/Y in FQ3 to $5.11B, and 11 months after the company unveiled a 4-step inkjet 3D printing process (called Multi Jet Fusion) said to be both faster and cheaper than rival technologies.
- Separately, Reuters reports HP is exploring a sale of its TippingPoint security appliance unit, which sells next-gen firewalls, threat-prevention systems, and intrusion prevention systems. Sources state P-E firms have expressed interest, and that the business could fetch $200M-$300M.
- Reuters adds HP is "reviewing all parts of its business to find assets that may not fit into the separate companies" created by its breakup. Corporate security appliance demand has been healthy, thanks in part to a string of high-profile cyberattacks, but the market is also intensely competitive. Notable players include Cisco, Check Point, Juniper, Palo Alto Networks, Fortinet, and FireEye.
Jun. 4, 2015, 4:30 PM
- HP (NYSE:HPQ) was "nearing a deal to acquire Computer Sciences Corp. (NYSE:CSC) last month until the talks broke down," Bloomberg reports. According to one source, HP "doesn’t intend to revisit" deal talks.
- With a current market cap of $9.7B (an M&A premium could have pushed its valuation above $11B), CSC would at least have been HP's biggest acquisition since the ill-fated 2011 Autonomy purchase. CSC, which has reportedly tried to sell itself in prior years as well, is 2 weeks removed from announcing it's breaking up into a commercial IT services firm and a U.S. public sector services firm.
- HP, whose own breakup takes effect in 5 months, has suggested its enterprise ops (to be known as Hewlett-Packard Enterprise post-breakup) could make big purchases - the company recently closed a $3B deal to buy Wi-Fi hardware/software vendor Aruba Networks. Raymond James speculated today HP will buy EMC (current market cap of $52.4B), in part to get hold of VMware (NYSE:VMW).
- Separately, HP says it will show off a prototype of its cutting-edge Machine computer architecture next year; the system will pack 2,500 CPU cores and 320TB of DRAM within a single server rack. By 2020, HP wants to offer Machine servers relying on Memristors, a next-gen memory format that would replace both DRAM and hard drives/NAND flash.
May 26, 2015, 2:19 PM
- HP (NYSE:HPQ) has returned the Friday gains it saw in the wake of its mixed FQ2 results and in-line FY15 EPS guidance. Today's selloff comes amid a 1.3% drop for the Nasdaq, and a 1.1% drop for the S&P.
- Separately, HP has announced it's acquiring ConteXtream, provider of a comprehensive software-defined networking (SDN) platform for carriers. Terms are undisclosed.
- SDN shifts the control and orchestration of network traffic flows from switches/routers to software-based controllers. Among other things, ConteXtream's platform includes SDN controller and mapping software, and software for powering commodity switches and analyzing network performance. An unnamed U.S. wireless carrier (possibly Verizon, which has invested in ConteXtream) is a customer.
- While discussing the deal, HP highlights the ability of SDN solutions to enable network functions virtualization (NFV), which allows dedicated/proprietary telecom hardware to be replaced with standard x86 servers (such as HP's). The ConteXtream purchase follows a deal by Ciena to buy carrier SDN vendor Cyan.
May 21, 2015, 10:29 AM
- Two days after a Tsinghua Unigroup spokesman said the P-E firm is buying a 51% stake in HP's (HPQ +1.2%) H3C Technologies Chinese networking hardware unit, HP announces it's selling a 51% stake in H3C and its Chinese server, storage, and IT services ops for $2.3B. The deal values the combined company at $4.5B net of cash/debt - less than the $5.5B HP had reportedly valued H3C at.
- HP asserts "the new H3C" will have $3.1B in annual sales, and possess "a market-leading portfolio that will be #1 in networking [in China] and a leader in servers, storage and technology services." The deal is expected to close by year's end.
- HP, whose Chinese sales (like those of other U.S. IT giants) have been hurt by the NSA spying uproar, will maintain full ownership of its Chinese PC/printing, software, Wi-Fi hardware (Aruba Networks), cloud services, and enterprise services ops. The WSJ refers to these businesses as "less politically sensitive," and reports HP will maintain the right to appoint H3C's chairman and CFO.
- The announcement comes ahead of HP's FQ2 report, due after the close.
Apr. 21, 2015, 10:06 AM
- Looking to streamline ahead of its PC/printing spinoff, HP (HPQ -0.7%) is selling its Snapfish online photo-printing/storage unit to digital photo fulfillment services firm District Photo for an undisclosed sum. The deal is expected to close in the second half of FY15 (ends in October); Snapfish will continue using HP's printing hardware/software afterwards.
- HP bought Snapfish for over $300M in 2005. Reuters reported last September the IT giant was thinking of selling the unit; Bloomberg reported a month later P-E firms had decided to pass. Rival Shutterfly (SFLY -1.1%), also the subject of M&A rumors, is slightly lower today.
- Separately, HP has announced it's partnering with threat-prevention hardware/software/services leader FireEye (FEYE +3.5%) to deliver "a comprehensive suite of security remediation services underpinned by FireEye's advanced threat detection, intelligence, methodologies and incident response expertise."
- The joint offerings, which will be sold by HP's massive IT services arm, include a global incident response and compromise assessment services from HP and FireEye's Mandiant unit (hired by many firms to probe cyberattacks), and managed threat-protection services that "provide 24/7 security monitoring for indications that a cyber-attack has bypassed traditional technology defenses."
- News of the alliance comes a day after FireEye announced a partnership with firewall vendor/HP rival Check Point. FireEye's Q1 report arrives on April 30.
Mar. 26, 2015, 4:29 PM
- HP (NYSE:HPQ) is close to selling a 51% stake in its H3C Technologies Chinese networking hardware unit to state-backed Tsinghua Unigroup, the WSJ reports. Echoing an October report about HP's sale efforts, the paper states H3C is "worth roughly $5 billion in total."
- Sources state a sale might include "a separate server operation," and could still be a few weeks away. Tsinghua is said to be competing with other bidders, including investment firm China Huaxin.
- Tsinghua has bought Chinese chipmakers RDA and Spreadtrum, and since formed a mobile processor partnership with Intel. HP, meanwhile, saw its networking revenue fall 11% Y/Y in the January quarter, something that was blamed on "execution issues" in the U.S. and China. Like other U.S. enterprise IT firms, the NSA scandal has taken a toll on HP's Chinese sales.
- The report comes as HP gets set to acquire enterprise Wi-Fi hardware/software vendor Aruba Networks ahead of a PC/printing spinoff expected to occur by the end of FY15 (ends Oct. '15).
Mar. 2, 2015, 8:49 AM| Mar. 2, 2015, 8:49 AM | 5 Comments
Feb. 25, 2015, 3:16 PM
- Bloomberg reports HP (HPQ -10.1%) is in talks to acquire enterprise Wi-Fi hardware/software provider Aruba Networks (ARUN +22.5%), and that a deal could be announced as soon as next week. Aruba has skyrocketed on the report, and has taken rival Ruckus (RKUS +4.7%) higher with it. Aruba's market cap is now around $2.5B.
- Aruba is the enterprise Wi-Fi market's #2 player - behind Cisco (NASDAQ:CSCO), which towers over the space - and HP is also in the top-5. IDC estimates Cisco, Aruba, Ruckus, and HP respectively had Q2 2014 enterprise Wi-Fi shares of 46.8%, 11.8%, 6.2%, and 4.5%.
- HP, whose shares have plunged today due to an FQ1 revenue miss and soft guidance, saw its total networking revenue drop 11% Y/Y in FQ1 - "execution issues" in the U.S. and China were blamed. The IT giant has suggested it's open to making enterprise acquisitions ahead of its PC/printing spinoff.
Feb. 9, 2015, 7:14 PM
- HP (NYSE:HPQ) is acquiring Voltage Security, a provider of enterprise encryption, tokenization, and encryption key management software for e-mails, documents, payments data, and other content. Terms are undisclosed.
- Voltage's offerings will complement HP's Atalla data/payments security software. The IT giant praises the ability of Voltage's products to "allow enterprises to use protected data in applications without having to re-architect their applications or adopt fragmented frameworks" - technologies such as format-preserving encryption and stateless tokenization help - and proclaims the deal will allow it to "offer customers unparalleled data protection capabilities built to close the gaps that exist in traditional encryption and tokenization approaches."
- Security spending has been easily outpacing broader IT spend, and that trend is expected to continue in 2015 as companies invest heavily in cybersecurity following a slew of high-profile breaches. However, fast-growing upstarts such as Palo Alto Networks, FireEye, and Fortinet have been taking share at the expense of IT giants.