September 13, 2010 by Post Team
Arcsight, Hewlett-Packard Co., the world’s largest maker of personal computers, is near a deal to buy security software maker ArcSight Inc., for about 1.5 billion in cash, according to a person familiar with the matter .
The deal could be announced as early as today, said the source, who requested anonymity because the talks are private. ArcSight had a market value of 1.21 billion and in terms of its September 10 closing price. The Wall Street Journal reported earlier that the proposed transaction.
The purchase would acquisitions by HP in areas such as smart phones, network equipment and services, reducing their dependence on low-margin PCs and servers. HP interim General Director Cathie Lesjak agreed on September 2 and pay 2.35 billion of 3PAR Inc., a maker of storage systems, winning a bidding war with Dell Inc., offering more than three times 3PAR 9 , 65 and the closing stock price on August 13 before Dell’s interest became public.
HP has “a lot of cash, and want to buy before buying Dell, Albert King, chief investment officer at Prophet Capital Inc., said from Taipei. “HP wants to put their money to work, because they think that their existing business may not provide a growth momentum in the future.”
The deal will help HP ArcSight serve the data center market, a key part of its growth strategy, “said Aaron thorns,anlyst at Stifel Nicolaus & Co. The security software can help customers in managing the centers, consisting of large server rooms, he said. The company is trying to turn its leadership in PCs in a more important role in corporate computing.
“The software is very important to HP,” wrote theanlyst based in St. Louis on an e-mail. Gill recommends buying shares of HP.
Suspicious Activity Monitoring
Mylene Mangalindan, a spokeswoman for Palo Alto, California-based HP, declined comment. ArcSight‘s spokesmen did not immediately return calls made after hours.
ArcSight, a maker of software used to identify suspicious activity on a corporate network, HP can help to better integrate security features into products. Intel Corp. last month agreed to pay 7.68 billion and McAfee Inc., a provider of programs that protect computers against viruses and malware. The chip maker paid a premium of 60 percent, underscoring the growing importance of computer security and fueling speculation that it may be related deals in the works.
Headquartered in Cupertino, California, ArcSight also specializes in programs that help companies and government agencies meet compliance requirements of their computer systems. It has over 1,000 customers, including U.S. Federal Reserve and Verizon Communications Inc., according to its website.
ArcSight Net income nearly tripled to 28.4 million in the fiscal year ending in April. Sales rose 33 percent to 181.4 million and in the period.
ArcSight dropped or 1 percent to 35.10 and September 10 in Nasdaq Stock Market trading. The shares have risen 39 percent since the beginning of August amid speculation he could be the target of an acquisition.
HP has declined by 26 percent this year on the market in New York Stock Exchange. The stock fell 54 cents, or 1.4 percent, at 38.28 and 10 September.
Former HP CEO Mark Hurd left August 6 after the company said he violated the rules of business conduct. An investigation found inaccurate information submitted on his behalf expenditure which had the effect of concealing a personal relationship with a contractor at HP. Since then he has been hired as president of Oracle Corp., reporting to the CEO of that company, Larry Ellison.
HP has hired the firm Spencer Stuart to help find an executive that can permanently replace Hurd. Lesjak, chief financial officer, has pulled out of the race.
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