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HP gulps down Aruba Networks for $3bn

Biggest buy since Autonomy

After a period of abstinence from mega buys, HP has dipped into its cash reserves to find $3bn (£2bn) for wireless infrastructure biz Aruba Networks.

The deal will form a welcome plug to HP's sliding network biz, which fell 10.8 per cent to $562m (£365m) in the company's first quarter results last week.

Aruba posted sales of $729m (£473m) for its full year results in 2014. In its second quarter numbers last week, revenue rose 21 per cent to $212.9m (£138m) and net profit came in at $5.6m versus a net loss of $10.7m in the same quarter a year earlier.

Meg Whitman, chief exec of HP, claimed in a canned statement:

"By combining Aruba's world-class wireless mobility solutions with HP's leading switching portfolio, HP will offer the simplest, most secure networking solutions to help enterprises easily deploy next-generation mobile networks."

Aruba chief exec Dominic Orr cooed: "Together with HP, we have a tremendous opportunity to become an even greater force in enterprise mobility and networking."

Under the deal, Aruba is to become part of the HP Networking business within HP’s Enterprise Group.

The corporate gobble comes ahead of HP's split later this year with the PC and printer business to be hived off to form HP Inc, and the remainder of the organisation – including the soon-to-be-slurped Aruba – branded Hewlett Packard Enterprise.

HP is in the middle of a five-year turnaround plan, having chopped tens of thousands of workers to cut costs and free up money to invest in R&D and respond to customers' shift towards consuming technology like a utility.

Both Orr and Aruba's CTO, Keerti Melkote, will join HP and report to Antonio Neri, senior veep.

Neri said the deal will lead to a simplified "converged solution" which will be "easier for our channel to sell".

The transaction is expected to close during the second half of HP’s fiscal year 2015.

Since splashing $11.1bn (£7.3bn) on Autonomy in 2011, HP has made just three acquisitions. In September 2011 it acquired open source software provider Eucalyptus, network virtualisation biz Shunra in May 2014 and software provider Hiflex in December 2011. ®

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