clock menu more-arrow no yes mobile

Filed under:

HP Confirms $3 Billion Deal for Aruba Networks

Aruba CEO Dominic Orr will take over HP's networking business.

Computing and IT giant Hewlett-Packard confirmed this morning that it has reached a deal to acquire Aruba Networks, a supplier of wireless networking gear used in corporate environments.

HP will pay $24.67 a share, which values Aruba at nearly $3 billion, or about $2.7 billion after accounting for Aruba’s cash and debt.

It’s the most significant acquisition by the company since Meg Whitman took over as CEO in 2011. And it likely won’t be the last. In an interview with Re/code last week, Whitman said she intends to be on a more aggressive hunt for acquisitions, as she plans to split HP into two companies later this year.

Aruba posted revenue of about $729 million in its 2014 fiscal year, which ended in July. HP’s networking unit, which is made up mostly of the assets it got when it acquired 3Com in 2009, reported sales of about $2.6 billion in its 2014 fiscal year, which ended in October.

Aruba’s CEO Dominic Orr and Chief Strategy and Technology Officer Keerti Melkote will head up HP’s networking business. They’ll report to Antonio Neri, head of HP’s $57 billion Enterprise Group. That’s the half of the company that will become Hewlett-Packard Enterprise, and which will be headed by Meg Whitman. HP’s PC and printing operations will break off and become a separate company called HP Inc. sometime in November.

HP’s networking business has been stirred up a bit in the last year. The unit’s prior head, Bethany Mayer, bolted for the CEO job at Ixia, a networking firm. Before that, Whitman had reassigned Mayer after sales of networking gear began to flag. Whitman has singled out the unit in earnings calls recently, saying she has been unhappy with its results.

The deal is expected to kick off a round of M&A speculation for other wireless networking firms. Shares of Ruckus Wireless, another maker of Wi-Fi gear for corporate environments, rose on the possibility that it might be next to be acquired. Another potential target might be Aerohive Networks, another Wi-Fi firm that went public last year.

This article originally appeared on

Sign up for the newsletter Sign up for Vox Recommends

Get curated picks of the best Vox journalism to read, watch, and listen to every week, from our editors.