HP, Others Looked At Acquiring 3PAR Before Dell's Offer


HP's offer on Monday to acquire storage vendor 3PAR a week after Dell first made its acquisition offer public was not the first time HP approached 3PAR about an acquisition.

A top HP executive on Monday said that HP had talked to 3PAR about a possible acquisition before Dell made its offer public, and an SEC filing indicates that a company listed as "Company B" but widely reported in several news outlets. including The Wall Street Journal, to be Hewlett-Packard made an earlier offer.

HP on Monday said it has offered to acquire 3PAR for $1.6 billion.

The offer came just one week after HP rival Dell said it planned to acquire 3PAR for $1.15 billion in a move that would give it enterprise-class storage virtualization technology.

Dave Donatelli, HP executive vice president and general manager for enterprise servers, storage, and networking, indicated during HP's Monday conference call after announcing its intent to acquire 3PAR that it has been in talks with the company for some time, as reported in the official transcript of that call.

"This has been part of an ongoing M&A process for us," Donatelli said. "As you know, we run a pretty disciplined process and we’ve been looking at this asset for a period of time."

When asked about why HP would offer six times 3PAR's annual revenue to acquire 3PAR, Donatelli said HP sees a "very strong internal business case" around that company.

"We believe that this is an opportunity for us again to grow revenue and grow it at a very nice margin, which drives that business case," he said.

He also compared the acquisition of 3PAR to HP's $2.7 billion acquisition of networking giant 3Com earlier this year.

"Very quickly after (3Com's) acquisition we were able to get them into huge large accounts globally and that’s by taking our scale and marrying that with our technology" he said. "From my perspective the 3PAR transaction is very similar. This is a company that has good technology but does not have the ability to bring it to market."

The saga about the acquisition of 3PAR goes back to late last year, according to SEC filings by both 3PAR and Dell.

 

Next: From Reseller Partner To Acquisition Target