Hewlett-Packard Company (NYSE:HPQ) Confirms Aruba Purchase

On Monday, Hewlett-Packard Company (NYSE:HPQ) confirms the plan of buying the Aruba Networks for a deal at $3 billion. According to HP, the deal will bolster on the wireless network in order to allow for better sale of the converged gear.

Are expert analyst predicting a future consolidation of HPQ?

According to the terms of the transaction, HP will pay about $24.67 in cash to buy Aruba. Total purchase is worth $2.7 billion net of debt and cash.

Aruba has about $729 as its annual revenue. It can be benefited from the networking business of HP.

According to both the companies, the business campus essentially ventures wireless equipments. Keerti Melkote, Aruba CEO Dominic Orr and strategy chief will lead it. There are chances of business of Aruba to lump into HP’s enterprise business.

In the statement, Hewlett Packard said the deal would not only bolster the networking, but will also add to earnings.

To justify the Aruba purchase, Hewlett-Packard Company (NYSE:HPQ) outlined the following parts:

  • On corporate campuses, the Next- Gen 802.11ac Wi-Fi will provide better support, with better mobility and access.
  • With broader enterprise offering HP can integrate, with Aruba’s gear.
  • The wireless mobility equipment of the Aruba will blend well with the switching portfolio of HP.

With HP’s channel, Aruba can get more sales throughout.

The analyst has mixed reviews on what the Aruba brings for the tablet of Hewlett-Packard Company (NYSE:HPQ). According to Brian White, Cantor Fitzgerald analyst, another section is more pressing for HP. In a research note White said:

Aruba, which gives tough competition to the Cisco and Ruckus Wireless, has given a shot in the arm to HP’s Networking business. In the China and U.S., the networking business was hampered in the recent quarter. HP has built a strong networking portfolio over time.

With Aruba, there are chances of better increase in the share value of HP in the market.

About the Author

Sally joined the US Markets Daily News Team in April 2011 as a Multimedia Journalist.

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