HP goes shopping: Targets Aruba Networks acquisition

Hewlett-Packard Co. could be poised to make one last acquisition before it splits itself in two, with a report from Bloomberg suggesting it’s looking to snap up wireless networking infrastructure technology outfit Aruba Networks Inc.

Bloomberg cites the usual anonymous sources in its report, and says the deal could be announced as soon as next week, if it doesn’t fall through. Neither company would speak on the record when approached, but Aruba is certainly one hot property right now, with the firm set to record $1 billion a year in sales by 2017.

Aruba Networks is also set to announce its Q2 2015 financial results later today, having recorded revenues of $208 million for the first quarter, a 29 percent year-on-year rise.

If the deal does go ahead it would barely make a dent in HP’s overall revenues, but The Register reports it would provide a welcome boost to its poorly-performing networking business, which saw revenues slip by 10.8 percent year-over-year to just $562 million in its most recent quarter.

Rumors of the acquisition surfaced just days after HP CEO Meg Whitman said the company was in a position to make acquisitions again, following a generally disappointing quarterly earnings report. Whitman’s comments saw HP’s stock price take a tumble, but the good news for Aruba Networks is its shares have shot up by 21 percent since Bloomberg’s report was published.

Assuming the deal does go through, it’s likely that Aruba Networks would be absorbed into the new Hewlett-Packard Enterprise company that’ll be born later this year when HP completes its planned metamorphosis into two separate companies. Hewlett-Packard Enterprise is the entity that’ll take over HP’s enterprise, hardware and software businesses. Meanwhile, HP, Inc., will keep the firm’s PC and printer businesses up and running.

Hewlett-Packard Enterprise would gain a much bigger slice of the wireless mobile market if the deal goes through, adding to its own “converged campus networking” gear. It’s a hot market as evidenced by Aruba Network’s own growing revenues, and could become even bigger as businesses switch to Wi-Fi to ease the pressure on cellular networks.
source:http://goo.gl/dVFyub

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