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HP buying spree: Hewlett-Packard to pay $1.5B for ArcSight [San Jose Mercury News, Calif.](San Jose Mercury News (CA) Via Acquire Media NewsEdge) Sept. 13--Hewlett-Packard is continuing its recent spending spree by buying ArcSight, a Cupertino security software company, in a deal worth about $1.5 billion, the two companies confirmed today. HP said it will pay $43.50 a share for the Cupertino company, which makes software that detects intrusion attempts on big computer networks. The deal will help HP beef up its line of software for commercial computer systems, as it increasingly tries to sell a full range of hardware, software and tech services. "The combination of HP and ArcSight will provide clients with the ability to fortify their applications, proactively monitor events and respond to threats," HP executive vice president Bill Veghte said in a statement announcing the deal. The deal is the latest in a series of big acquisitions that HP has negotiated in recent months. Earlier this year, it closed a $2.7 billion deal to buy networking company 3Com and a separate $1.2 billion deal to buy smartphone maker Palm. Last month, HP agreed to buy the Fremont data-storage company 3Par for $2.4 billion after a hard-fought bidding war with Dell. Analysts say each of the acquisitions fills a niche in the company's broader portfolio of products, but some have questioned whether HP paid too much in the recent deals. Financial analyst Aaron Rakers of the Stifel Nicolaus investment firm also noted that HP is currently searching for a new CEO to replace Mark Hurd, who resigned unexpectedly last month. Buying ArcSight makes sense in light of HP's "overall enterprise strategy," Rakers wrote in a note to clients today, but he added, "we believe Street sentiment would likely rather see the company get a new CEO announcement behind them and look to digest some of the acquisitions it has recently or will be completing." ArcSight, which was originally funded in part with an investment from the CIA venture fund In-Q-Tel, went public in a 2008 IPO. The company has about 500 employees and reported $28 million in profit on $181 million in sales last year. The company's stock was trading below $30 for most of the past year, but the price shot up in recent weeks amid reports that it was seeking a possible buyer, such as HP, Oracle or IBM. The stock closed Friday at $35.10 and was trading above $43 today. Contact Brandon Bailey at 408-920-5022. Follow him at Twitter.com/BrandonBailey. To see more of the San Jose Mercury News, or to subscribe to the newspaper, go to http://www.mercurynews.com. Copyright (c) 2010, San Jose Mercury News, Calif. Distributed by McClatchy-Tribune Information Services. For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com, e-mail [email protected], or call 866-280-5210 (outside the United States, call +1 312-222-4544) |