US private equity firm Bain Capital Partners has signed a definitive agreement to acquire network equipment provider 3Com Corporation for about USD2.2bn in cash.
US private equity firm Bain Capital Partners has signed a definitive agreement to acquire network equipment provider 3Com Corporation for about USD2.2bn in cash. Shareholders will receive USD5.30 in cash for each 3Com share, a premium of around 44 per cent over the company’s USD3.68 closing price on September 27.
‘The 3Com board of directors and senior management team have thoroughly reviewed our strategic alternatives and have determined that the agreement with Bain Capital provides the best value for 3Com shareholders,’ says president and chief executive Edgar Masri. ‘We believe that this agreement better positions 3Com to establish itself as a global networking leader, which will benefit our employees, our customers and our partners.’
Jonathan Zhu, a Bain Capital managing director based in Hong Kong, says: ‘As business becomes ever more global, companies need to enhance their technology infrastructure to compete more effectively in the broader economy.
‘3Com has a strong competitive position, and we believe there are significant opportunities to grow by acquiring customers and introducing new products. We look forward to working with the management team and the company’s strategic partners to seize the worldwide growth opportunity that exists for 3Com’s communications networking solutions.’
As part of the transaction, affiliates of Huawei Technologies will acquire a minority interest in the company and become a commercial and strategic partner of 3Com. The merger is expected to be completed by the first quarter of 2008.
Citigroup Global Markets Asia, UBS, HSBC, ABN Amro Bank, and Bank of China (Hong Kong) have provided firm financing commitments to Bain Capital Partners. Goldman Sachs is exclusive financial advisor to 3Com and provided a fairness opinion to the company in connection with the transaction, while Wilson Sonsini Goodrich & Rosati acted as the firm’s legal advisor. Citigroup Global Markets and UBS Securities are financial advisers to Bain Capital, while Ropes & Gray acted as legal adviser.
3Com Corporation is a provider of secure, converged voice and data networking solutions for enterprises that includes H3C Technologies, a China-based provider of network infrastructure products. Through its TippingPoint division, 3Com is a provider of network-based intrusion prevention systems.
Bain Capital manages private equity, venture capital, public equity and leveraged debt assets with more than USD50bn in assets under management. Since its establishment in 1984, Bain has made private equity investments and add-on acquisitions in more than 250 companies worldwide, and has a team of almost 200 professionals.
The firm has a long history of investing in technology businesses, including current investments in SunGard Data Systems, NXP, Sensata Technologies, FCI, Sun Telephone, Applied Systems and MEI Conlux. Based in Boston, Bain has offices in Hong Kong, Shanghai, Tokyo, New York, London and Munich.
