Aruba Networks, Inc. (NASDAQ:ARUN) Announces HP Is Purchasing Them For $2.7 Billion

Aruba Networks, Inc. (NASDAQ:ARUN) announced today that the rumored deal with HP has been finalized and is official. HP will pay $2.7 billion for the networking company. The deal specifies that HP will pay $24.67 in cash for every share of Aruba and is expected to close during the second quarter of this year. This deal becomes HP’s largest acquisition since the failed attempt to buy Autonomy PLC in 2011 for $11 billion.

Have analyst identified a strong buy signal for ARUN?

Complimenting Portfolios

Aruba specializes in wireless networking and this allows HP to quickly expand their wireless mobility operations. It allows HP to bring Aruba’s industry leading solutions and mesh them with HP’s portfolio of switching products. This will put HP in a strong position to provide its clients with the most secure networking solutions for enterprises and assist them in deploying next-generation mobile networks. The mobile marketplace is growing quickly and this offers the chance to HP for improving its role in wireless local area networking and also allows the employees to access work systems via their personal wireless devices.

Bigger Plans

This is all part of a larger plan by HP to expand its role in wireless networking and to consolidate and streamline its current businesses. The company is also planning to split its printer business from its corporate hardware division. The plan is to accomplish this during fiscal 2015. When the deal is completed, Aruba will operate as a subsidiary of HP. Aruba Networks, Inc. (NASDAQ:ARUN)’s current chief executive and chief of technology will run the company but will report to the head of HP’s enterprise group. The addition of Aruba to HP’s model is a critical development for the company as it needs to develop more progressive revenue streams and move away from the older technologies it currently relies on.

Technicals

The stock ran up on today’s news and stopped right at the payout price. The technical have lost importance now and the stock has become a method for capitalizing on the buyout offer which is valued at $24.67 per share.

About the Author

Coper graduated from the University of Chicagi with majors in political science and journalism.

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