First, Avaya got snapped up by private equity investors; now it’s 3Com. 3Com has been acquired by Bain Capital Partners for $2.2-billion – a move that will see it be taken private and have Huawei Technologies take a minority stake.
3Com shareholders will receive $5.30 in cash for each share of 3Com stock, or a premium of about 44 percent over the stock’s $3.68 closing price on Thursday.
With Avaya and 3Com now snapped, the question is who’s left for Nortel to acquire – if it wants to make a major move. One option is Polycom, which seems to be a pretty good fit. Another route is smaller, strategic acquisitions to bolster it Wi-Max, IP-TV or enterprise data businesses.
Good. Nortel was wise to pass on 3Com. There just isn’t much value there to unlock.
Casual Observer
By the way, if the value of 3Com to the market was $2.2B for a company that hasn’t made any money and continues to bleed cash without much improvement in growth prospects, I’d say the value of Nortel, which operationally is actually headed in the right direction financially, is greatly undervalued. It wouldn’t suprise me to see the private equity guys buy up more distressed companies like 3Com (i.e. Ciena, Tellabs, Extreme, Foundry etc) and package them up for a sale to Nortel at some point. In the larger battle against Cisco, there are only three other companies in my opinion that could be equipped to fight that battle – Alcatel/Lucent, Juniper and Nortel – and Alcatel/Lucent still has a massive cleanup operation (similar to what Nortel is going thru) to complete.
By the way, the game by the private equity guys has been to have the hedge funds do their dirty work and short companies so they can come in and scoop them up at low low prices. The hedge funds are simply out of control and if Nortel doesn’t watch it they will become another victim of this.
3Com Snapped Up
First, Avaya got snapped up by private equity investors; now it’s 3Com. 3Com has been acquired by Bain Capital Partners for $2.2-billion – a move that will see it be taken private and have Huawei Technologies take a minority stake.
3Com shareholders will receive $5.30 in cash for each share of 3Com stock, or a premium of about 44 percent over the stock’s $3.68 closing price on Thursday.
With Avaya and 3Com now snapped, the question is who’s left for Nortel to acquire – if it wants to make a major move. One option is Polycom, which seems to be a pretty good fit. Another route is smaller, strategic acquisitions to bolster it Wi-Max, IP-TV or enterprise data businesses.
More: eWeek has more details about the deal.