Computer and printer maker Hewlett-Packard Co. (HPQ) agreed Monday to acquire Wi-Fi gear maker Aruba Networks, Inc. (ARUN) for $24.67 per share in an all-cash deal valued at about $3 billion, and net of cash and debt about $2.7 billion.
Aruba Networks Inc. (ARUN), one of our G&V stocks published in 2011. ARUN also recently featured on Short-Term Investor on Nov. 21, 2014 at a price of $20.00. The acquisition price of $24.67 per share represents a gain of 23.4% within 65 trading days from our published price.
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The deal combines Aruba's wireless mobility solutions with HP's wired switching solutions to create an enterprise mobility leader. The deal also enables HP to accelerate enterprise transition to providing next-generation converged campus network solutions by leveraging the strong Aruba brand.
"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," HP Chairman, President and CEO Meg Whitman said in a statement.
The offer price represents a 34.2 percent premium over Aruba's unaffected closing price of $18.38 on February 24, the day prior to media reports on the deal emerging.
Sunnyvale, California-based Aruba is listed on the NASDAQ and Russell 2000 Index. It has operations throughout the Americas, Europe, Middle East, Africa and Asia Pacific regions. Aruba had revenues of $729 million in fiscal 2014, and has reported compound annual revenue growth of 30 percent over the last five years.
The deal, approved by both companies' boards of directors, is expected to close in the second half of HP's fiscal 2015. The closure of the deal is primarily subject to Aruba stockholder approval and regulatory approvals in the US and other countries.
HP currently expects the deal to be accretive to earnings in the first full year following close.
The combined entity will be led by Aruba's CEO Dominic Orr, as well as Chief Strategy and Technology Officer Keerti Melkote, both reporting to Antonio Neri, leader of HP Enterprise Group.
"Together with HP, we have a tremendous opportunity to become an even greater force in enterprise mobility and networking. This transaction brings together Aruba's best-of-breed mobility hardware and software solutions with HP's leading switching portfolio," Orr stated.
In Monday's regular trading session, HPQ is currently trading at $34.77, down $0.07 or 0.20% on a volume of 1.06 million shares, and ARUN is currently trading at $24.41, down $0.40 or 1.61% on a volume of 12.44 million shares.
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