Feeds

3Com finally sells out to China

Could've been a contender

Build a business case: developing custom apps

Networking gear nearly man 3Com has agreed to a $2.2bn buyout by an investment outfit backed by its former Chinese manufacturing partner Huawei Technologies.

The move, fronted by Bain Capital Partners, will take 3Com into private ownership and shareholders will bag a 44 per cent premium on the stocks' current $3.68 listing. Its last financials revealed widening losses of $18.7m, after hints of a potential comeback for the firm.

In July it was reported that Nortel and US-based private equity groups were sniffing around the firm for a possible takeover.

Links between 3Com and Huawei were forged when undisputed networking champ Cisco took Huawei to court over alleged patent infringements in 2003. 3Com stuck its oar in by taking Huawei's side.

The case was later dropped, and soon after 3Com and Huawei signed a joint venture agreement to attack Cisco's dominance. Last Novemeber however, 3Com bought Huawei out of the partnership for $882m.

As part of today's deal, Huawei affiliates take a minority stake in the firm, and Huawei will be a "commercial and strategic partner".

The announcement confirming today's deal is here. It'll go through in Q1 next year, assuming shareholders are happy to take the money and run.

3Com has negotiated a good mark-up on today's price. However, anyone who'd held onto their shares through thick and thin might be sobbing quietly. The company's shares debuted at around $28 a share back in 1989 and after a few early wobbles, started moving remorselessly upwards.

For at least part of the 90s networking boom the firm was mentioned in the same breath as Cisco, but whereas the latter bought itself into complete domination of the internet, 3Com inadvertently bought itself into the PDA market, picking up Palm when it bought dial-up modem vendor USRobotics.

In February 2000 3Com's shares were changing hands at an irrationally exhuberant $98. A $50 divi payment last that year brought things down to a much more sober $16 in August that year, though it still managed to touch $19 later that year. However, tech was definitely off the menu by then, and shares have been pretty much in single figures ever since.®

Boost IT visibility and business value

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
VVOL update: Are any vendors NOT leaping into bed with VMware?
It's not yet been released but everyone thinks it's the dog's danglies
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.