HP Proposes to Acquire 3PAR for $24 per Share in Cash
(Updated below with excerpts from 6am PT conference call with financial analysts)
HP today announced that it has submitted to 3PAR Inc. (NYSE: PAR) a proposal to acquire all of the outstanding shares of 3PAR for $24.00 per share in cash, or an enterprise value of $1.6 billion.
The proposed transaction represents a 33.3 percent premium above the price proposed by Dell Inc. HP’s proposal is not subject to any financing contingency and has been approved by HP’s board of directors. Once approved by 3PAR’s board, HP expects the transaction to close by the end of the calendar year.
The addition of 3PAR’s next-generation storage architecture will accelerate HP’s winning Converged Infrastructure strategy, which provides customers with an unmatched portfolio of intellectual property across storage, server and networking solutions. 3PAR’s highly scalable storage systems will further strengthen HP’s ability to deliver the highest levels of performance, efficiency and reliability to customers worldwide. The combination will bolster HP’s storage offerings and diversify its portfolio across key growth markets.
Read the rest of the announcement and disclosures relating to solicitation and forward-looking statements.
Investor webcast: Transcript
Read the transcript of the August 23, 2010 conference call with investors on HP's investor relations website.
Transcript excerpts
All responses attributable to Dave Donatelli, EVP and GM of HP's Enterprise Servers, Storage, and Networking Business.
On due diligence and HP’s M&A acumen:
...we have done our work on this deal and know this company well. We have the highest respect for the management team and skilled employees, and 3PAR's culture of innovation closely mirrors ours. We intend to invest in the Company's technology, helping it to bring new capabilities to market at an even faster pace. We are confident in our ability to seamlessly execute and integrate this acquisition as we've done many times before with other companies.
On the potential for more bids:
We think we have a superior offer here and we look forward to the response.
On the business case for the deal:
…we have a very strong internal business case around this asset. We believe that this is an opportunity for us again to grow revenue and grow it at a very nice margin, which drives that business case.
…if you look at 3Com, which was our networking acquisition we did in this same space, just since closing that in April we have over 300 proof-of-concepts already underway. And I think it's a great analogy for this transaction in that if you find a good technology, what a lot of these smaller independent companies have a problem of is that customers want to buy from fewer larger companies that they trust and that have global support for them…
From my perspective the 3PAR transaction is very similar. This is a company that has good technology but does not have the ability to bring it to market. We can bring it to market directly, we can bring it through our channel partners, we can bring it through our services group. And that gives us the ability to scale this asset quite rapidly.
[Editor's note: read more about HP Networking's success with 3com in the transcript to an August 19, 2010 conference call with investors]
