HP Acquires 3Par with $2.4 B Bid

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Author: John Duckgeischel on September 2, 2010 - 10:26 AM

In dramatic fashion, HP has surpassed Dell’s last ditch effort, by securing 3Par Inc. with a $33 per share bid. Today Dell has served notice that will it submit no further bids, choosing instead to let HP go forward with its plans to acquire the company for $2.4 billion. The winning HP was more than double the price of Dell’s initial offer and more than three times of the stock price within the last month. "We thought the price Dell originally offered was already pretty rich," Shaw Wu, a veteran tech analyst with Kaufman Brothers investment firm, said in an interview earlier this week. He added that "it remains to be seen" whether the purchase of 3Par will pay off.

Prior to Dell coming up with its last minute offer some analysts had speculated that Dell may drop out of the bidding war for the company. Although experts have agreed that 3Pars data storage innovations offer strategic value, they have also said that the acquisition is at a premium price for a company that reported a $3 million loss on $194 million in sales last year. The “thin client” architectural approach that 3Par has incorporated into its product line fits well into HP’s aggressive plans to be a key player in the cloud computing market. Unni Narayanan, CEO of Primary Global Research, which is a technology research company, said that "Whichever player can win in storage is going to be in a better position to win the entire back-end data center infrastructure.” Many analysts believe that HP’s aggressive bidding for 3Par reflects their position that 3Par is an attractive addition to their product portfolio, but it also shows that they wanted to thwart Dell, as they viewed them as a significant threat as a serious cloud computing competitor.