Hewlett Packard has agreed to buy Wi-Fi solutions provider Aruba Networks Inc for an equity value of $3 billion in a bid to boost its networking business.
HP is hoping that acquiring California-based Aruba will help the company compete in the campus networking solutions market, which it estimates to be worth over $18bn. The company said it will acquire Aruba for $24.67 per share in cash.
Based in Sunnyvale, Aruba has some 1,800 employees and has had revenues of $729 million in fiscal 2014. The company sells Wi-Fi gear to a wide range of clients including California State University and Dalian Wanda Group, which controls China’s biggest property developer and largest cinema chain.
“Enterprises are facing a mobile-first world and are looking for solutions that help them transition legacy investments to the new style of IT,” said Meg Whitman, chairman and chief executive of HP.
“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.”
As part of the acquisition deal, the operation of the combined company will be led by Aruba Chief Executive Officer Dominic Orr and Chief Strategy and Technology Officer Keerti Melkote. They will report to Antonio Neri, head of HP Enterprise Group.
“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,” Aruba CEO Dominic Orr said.
HP said that it expects to close the deal in the second half of the company’s 2015 financial year.