Latest acquisition by HP

Hewlett-Packard Plans to Buy 3Com for $2.7 Billion

By Connie Guglielmo and Rochelle Garner

Nov. 11 (Bloomberg) -- Hewlett-Packard Co., the world’s biggest personal-computer maker, plans to buy 3Com Corp. for $2.7 billion, stepping up competition with Cisco Systems Inc. in the computer-networking market.

3Com shareholders will receive $7.90 a share in cash, 39 percent more than today’s closing price, Palo Alto, California-based Hewlett-Packard said in a statement. The transaction is expected to close in the first half of next year, Hewlett-Packard said.

Chief Executive Officer Mark Hurd is seeking to add to Hewlett-Packard’s $118 billion in annual sales, expanding into markets that offer higher profit margins than printers or personal computers. Hewlett-Packard did a “full search” of networking companies and selected 3Com partly because of its presence in China, said Dave Donatelli, executive vice president and general manager for servers and networking.

“They get a huge beachhead in China, that’s first and foremost,” Greg Mesniaeff, an analyst with Needham & Co., said in an interview from New York. 3Com also “has some success building momentum outside of China,” he said.

Hewlett-Packard also reported profit, excluding some items, of $1.14 a share in the fiscal fourth quarter. That topped the average estimate of $1.11 in a Bloomberg survey. Sales fell 8 percent to $30.8 billion. Analysts had estimated $29.8 billion.

First Quarter

For the first quarter, revenue will be $29.6 billion to $29.9 billion, and earnings will total $1.03 to $1.05 a share, Hewlett-Packard said. Analysts predicted sales of $29.2 billion and earnings of $1.03 a share.

Hewlett-Packard fell as much as 65 cents to $49.35 in extended trading after closing at $50 on the New York Stock Exchange. The shares have gained 38 percent this year through the NYSE close.

3Com surged as much as $2.03, or 36 percent, to $7.72 in late trading after closing at $5.69 on the Nasdaq Stock Market. The stock has more than doubled this year.

Hewlett-Packard also boosted its sales and profit forecasts for 2010. For the year, revenue will be $118 billion to $119 billion, up from a previous prediction of as much as $118 billion. Earnings will be $4.25 to $4.35 a share, more than a previous forecast of as much as $4.30. Analysts predict sales of $118.1 billion and profit of $4.25 a share.

Data Centers

Adding 3Com increases competition with San Jose, California-based Cisco, the world’s largest networking company. Earlier this year, Cisco expanded into Hewlett-Packard’s turf of the corporate data center -- vast rooms of computers that store company files, transmit information and run vital business applications.

“It makes H-P well-positioned to rival Cisco in the data center,” said Vanessa Alvarez, a Boston-based analyst with research firm Frost & Sullivan. “It gives H-P an enterprise customer installed base.”

Hurd, 52, said in March at an investor conference that Hewlett-Packard will take a “disciplined” approach to acquisitions. The company has bought more than 30 companies since he took over as CEO in 2005. Hewlett-Packard already expanded its computer-services business last year with the $13.2 billion takeover of Electronic Data Systems.

“By joining 3Com with Hewlett-Packard, we have created the No. 2 networking company,” Donatelli said in an interview. “Customers have been frustrated by the fact that their networks have been proprietary, they’ve been slow to change, they’ve been very high cost relative to other things they buy.”

3Com, based in Marlborough, Massachusetts, has 2,400 engineers in China who will join Hewlett-Packard to work on research and product development, Donatelli said.

Chinese Sales

3Com gets about half of its revenue from sales in China, the byproduct of a joint venture it since ended with Huawei Technologies Co. The company has been working to expand to corporate customers outside of China, using lower-cost products as a wedge to counter Cisco.

Both 3Com and Cisco make routers and switches, devices that direct network traffic. Large companies typically buy switches to transmit data. Phone carriers tend to purchase routers, which are more expensive.

“Cisco is very confident in our business strategy, commitment to product innovation and ability to provide strategic business value to our customers in a highly competitive marketplace,” Terry Alberstein, a spokesman for Cisco, said in an e-mailed statement.

No. 2

3Com was second to Cisco in the market for computer networking equipment before its sales spiraled down starting in the late 1990s. The company recorded revenue of $5.6 billion in 1997 and less than half that four years later, after the bursting of the technology bubble. Cisco rebounded, taking sales from competitors such as 3Com, and is more than four times bigger than it was in 1998.

In 2003, 3Com left Silicon Valley, moving to Massachusetts from Santa Clara, California. The company owned the naming rights to the home stadium of the National Football League’s San Francisco 49ers between 1996 and 2002.

Robert Mao became CEO in April 2008, replacing Edgar Masri, a month after a previous takeover agreement was thwarted. 3Com had agreed in September 2007 to be bought for $2.2 billion by Huawei and private-equity firm Bain Capital LLC. The deal was withdrawn after some U.S. lawmakers said it would put 3Com’s anti-hacking technology, used by the Defense Department, in Chinese hands.

The company now has a new product line, based on switches and routers it sold to China, and in September reported its first sale to a data center outside of China.

‘Undervalued’ Company

“3Com is perhaps the most undervalued company in the networking space,”Zeus Kerravala, an analyst with Boston-based research firm Yankee Group, said in an e-mail. “It has the broadest enterprise portfolio of any company except Cisco.”

Shares of Brocade Communications Systems Inc., the largest maker of networking gear that connects storage computers, fell as much as 7 percent to $8.60 in late trading. Investors had speculated that Hewlett-Packard would buy Brocade after the Wall Street Journal said last month the company was shopping itself.

Morgan Stanley advised Hewlett-Packard on the deal, and Cleary Gottlieb was the company’s counsel. Goldman Sachs Group Inc. advised 3Com

Something worth sharing

A story worth sharing 4 years ago, an accident took my beloved away and very often I wonder, how does my wife, who is now in the heavenly realm, feel right now? She must be feeling extremely sad for leaving a husband who is incapable to taking care of the house and the kid. 'cos that is the exact feeling that I have, as I feel that I have failed to provide for the physical and emotional needs of my child, and failed to be the dad and mum for my child. There was one particular day, when I had an emergency at work. Hence, I had to leave home whilst my child was still sleeping. So thinking that there was still rice leftovers, I hastily cooked an egg and left after informing my sleepy child. With the double roles, I am often exhausted at work as well as when I am home. So after a long day, I came home, totally drained of all energy. So with just a brief hug and kiss for my child, I went straight into the room, skipping dinner. However, when I jumped into my bed with intention of just having a well-deserved sleep, all i heard and felt was broken porcelain and warm liquid! I flipped open my blanket, and there lies the source of the 'problem'... a broken bowl with instant noodles and a mess on the bedsheet and blanket! Boy, was I mad! I was so furious that I took a clothes hanger, charged straight at my child who was happily playing with his toy, and give him a good spanking! He merely cried but not asking for mercy, except a short explanation: "Dad, I was hungry and there wasn't anymore leftover rice. But you were not back yet, hence I wanted to cook some instant noodles. But I remembered you reminding me not to touch or use the gas stove without any adults around, hence I turned on the shower and used the hot water from the bathroom to cook the noodles. One is for you and the other is for me. However, I was afraid that the noodles will turn cold, so I hid it under the blanket to keep it warm till you return. But I forgot to remind you 'cos I was playing with my toys...I am sorry Dad..." At that moment, tears were starting to run down my cheeks...but I didn't want my son to see his dad crying so I dashed into the bathroom and cried with the shower head on to mask my cries. After that episode, I went towards my son to give him a tight hug and applied medication on him, while coaxing him to sleep. Then, it was time to clear up the mess on the bed. When everything was done and well past midnight, I passed my son's room, and saw that he was still crying, not from the pain on his little buttock, but from looking at the photograph of his beloved mummy.

A year has passed since the episode, I have tried, in this period, to focus on giving him both the love of his dad and mum, and to attend to most of his needs. And soon, he is turning seven, and will be graduating from kindergarten. Fortunately, the incident did not leave a lasting impression on his childhood memories and he is still happily growing up. However, not so long ago, I hit my boy again, with much regret. This time, his kindergarten teacher called, informing me of my son's absence from school. I took off early from work and went home, expecting him to explain. But he wasn't to be found, so I went around our house, calling out his name and eventually found him outside a stationery shop, happily playing computer games. I was fuming, brought him home and whack the hell out of him. He did not retaliate, except to say, 'I am sorry, Dad'. But after much probing, I realized that it was a 'Talent Show' organized by his school and the invite is for every student's mummy. And that was the reason for his absence as he has no mummy..... Few days after the caning, my son came home to tell me, the kindergarten has recently taught him how to read and write. Since then, he has kept to himself and stayed in his room to practise his writing, which I am sure, would make my wife proud, if she was still around. 'cos he makes me proud too!

Time passes by very quickly, and soon another year has passed. It's Syawal, and its Raya time. Everywhere the Raya spirit is in every passer-by...Raya song and frantic shoppers....but alas, my son got into another trouble. When I was about to knock off from the day's work, the post office called. Due to the peak season, the post master was also on an edgy mood. He called to tell me that my son has attempted to post several letters with no addressee. Although I did make a promise never to hit my son again, I couldn't help but to hit him as I feel that this child of mine is really beyond control. Once again, as before, he apologized, ' I'm sorry, Dad' and no additional reason to explain. I pushed him towards a corner, went to the post office to collect the letters with no addressee and came home, and angrily questioned my son on his prank, during this time of the year. His answer, amidst his sobbing, was : The letters were for Mummy. My eyes grew teary, but I tried to control my emotions and continued to ask him: " But why did u post so many letters, at one time?" My son's reply was: " I have been writing to mummy for a long time, but each time I reach out for the post box, it was too high for me, hence I was not able to post the letters. But recently, when I went back to the postbox, I could reach it and I sent it all at once..." After hearing this, I was lost. Lost at not knowing what to do, what to say.... I told my son, " Son, mummy is in the heavenly kingdom, so in future, if you have anything to tell her, just burn the letter and it will reach mummy. My son, on hearing this, was much pacified and calm, and soon after, he was sleeping soundly. On promising that I will burn the letters on his behalf, I brought the letters outside, but couldnt help opening the letter before they turn to ash. And one of the letters broke my heart.... Dear Mummy, I miss you so much! Today, there was a 'Talent Show' in school, and the school invited all mothers for the show. But you are not around, so I did not want to participate as well. I did not tell Dad about it as I was afraid that Dad would start to cry and miss you all over again. Dad went around looking for me, but in order to hide my sadness, I sat in front of the computer and started playing games at one of the shops. Dad was furious, and he couldnt help it but scolded and hit me, but I did not tell him the real reason. Mummy, everyday I see Dad missing you and whenever he think of you, he is so sad and often hide and cry in his room. I think we both miss you very very much. Too much for our own good I think. But Mummy, I am starting to forget your face. Can you please appear in my dreams so that I can see your face and remember you? I heard that if you fall asleep with the photograph of the person whom you miss, you will see the person in your dreams. But mummy, why havent you appear? After reading the letter, I cant stop sobbing. 'cos I can never replace the irreplaceable gap left behind by my wife....

For the females with children: Don't do so much overtime. If you cannot finish the work, it must be some kind of problems within the company, and it is not your sole problem. Feedback to your boss. Endless overtime may not necessary be the answer to the problem. Take care of your health so that you can treasure and take care of your little precious. For the married men: Drink less, smoke less, cos nothing can replace your good health, not even business nor clients. Try thinking this way, are you able to work till your clients are totally dependent on you? or your boss is totally dependent on you? In this society, no one is indispensable. Take care of your health, so that you can take care of your little precious and your loved ones. ： For those singles out there: Beauty lies in loving yourself first. With confidence and loving yourself, you will see the beauty in other things around you. You will be able to work better and happier. Don't let your health be affected by your work or your boss, so nothing matters more than your well being.

Credit to the unknown writer

Updated Pics

Finally, after 3 months of delay and whatnot...you can view pictures from our trip to London/Paris at this location http://www.zooomr.com/photos/polyfuze0411/view-blog/. I'm actually too lazy to properly align and caption all the pictures into blogspot format, so there you go!

Here are a couple of pics from the above site :

Can't wait to go to Karambunai at the end of this month, looks like Korea/Australia will have to be put on hold and all the best for my friends who will be leaving soon to join GSK or HP.

Regards,

MARK