[December 13, 2004]

3com Ends Year with a Bang Buying TippingPoint

BY JOHANNE TORRES

Mid-December has us not only dusting off Christmas stockings and displaying Jewish menorahs, but it is also the time of year where our companies are gearing up to complete the current quarter. At this point, anyone would think that all announcements of mergers and acquisitions have made it all the way to the published press before we all ring in the New Year.

Well, let’s now consider said companies that put in halt the last quarter result analysis to be able to end the year with a big bang. 3com decided to end the year just like that. The company announced that it has agreed to acquire IPS vendor TippingPoint Technologies Inc. for $430 million in cash.

The deal, valued in a close to a half a billion dollars, will surely position 3com amongst the ranks of Cisco, Juniper and other popular vendors in our industry. This acquisition will definitely beef up the company’s security for features like VoIP and other IP-based services. The networks system provider said its cash offer of $47 per share would mean a 13 percent premium over TippingPoint's closing price of $41.66 at the end of last week. The final amount of $430 million bundles in closing costs and assumed options. 3Com and TippingPoint plan to close the purchase in its fiscal third quarter ending in February 2005 and the deal is subject to regulatory and other conditions.

3com was mostly interested in, and tightly grabbing onto the TippingPoint's line of "intrusion protection" security products, which will aid 3com’s VoIP and other IP-based offerings. 3com’s acquisition of Austin, TX-based TippingPoint will add on about 125 employees to 3com’s roster, and will be lead by its CEO Kip McClanahan. TippingPoint has posted revenues of $5.7 million. Combined revenues are promising at a generated $698.9 million in revenue in its latest fiscal year, which ended in May for 3com and TippingPoint’s $5.7 million.