HP to acquire Aruba Networks for $3B

HP will acquire networking vendor Aruba Networks for about $3 billion, giving the manufacturer a strong boost in the enterprise WLAN market.

Aruba, based in Sunnyvale, Calif., has about 1,800 employees. The company had revenues of $729 million in fiscal 2014 and has reported compound annual revenue growth of 30 percent over the last five years.

Together, HP and Aruba will deliver next-generation converged campus solutions, leveraging the Aruba brand. The new combined organization will be led by Aruba's CEO Dominic Orr and Chief Strategy and Technology Officer Keerti Melkote, reporting to Antonio Neri, leader of HP Enterprise Group, the companies said in a press release.   

Both companies' boards of directors have approved the deal.

"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, HP's  chairwoman, president and CEO in the release. "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." 

"Together with HP, we have a tremendous opportunity to become an even greater force in enterprise mobility and networking," Orr said in the same release. "This transaction brings together Aruba's best-of-breed mobility hardware and software solutions with HP's leading switching portfolio.  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."

Cisco holds the No. 1 share position in the WLAN market. Aruba's share of the enterprise WLAN market increased to 11.5 percent in the third quarter of last year, up from 9.4 percent in the same period a year prior, according to International Data Corporation (IDC). Ruckus Wireless grew its market share to 6.3 percent.  

Of course, the deal is likely to kick off a round of M&A speculation for the other wireless networking firms. Re/code notes that shares of Ruckus rose on the possibility that it might be the next one to be acquired. Aerohive Networks, which went public last year, is another potential target.

For more:
- see The Wall Street Journal article (sub. req.)
- see this Re/code article
- see this CNET story
- see the press release

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