Hewlett-Packard is buying wireless networking company Aruba Networks for about $2.7 billion, in what amounts to HP's first major acquisition since its disastrous purchase of a British software company in 2011.
Aruba, based in Sunnyvale, Calif., makes Wi-Fi networking systems for shopping malls, corporate campuses, hotels and universities. Its business has grown as more people are using mobile devices at work, school and elsewhere. Aruba may help HP capitalize on that trend, which has cut into sales of traditional HP products such as desktop computers.
The deal also could help HP compete with tech rivals such as Cisco Systems and gain new access to Asian markets, particularly in China. Cisco currently sells about half of all commercial wireless networking gear worldwide, according to UBS analyst Amitabh Passi. He estimates HP and Aruba combined will account for 20 percent of global sales for such systems.
HP is seeking to expand its tech portfolio for business customers at a time when it is preparing to split into two companies — one focused on selling computer systems and software to businesses, and the other selling personal computers and printers. That's part of HP CEO Meg Whitman's plan for confronting a recent decline in sales.
Buying Aruba gives HP “a faster growing, higher margin business that fills a portfolio need without `betting the ranch',” Bernstein analyst Toni Sacconaghi wrote in a note Monday.
