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HP's offer represents 33% premium offer Dell's offer

Acquisitions and mergers appear to be accelerating at a furious pace these days in the tech sector. During the close of 2009 and during the opening months of 2010, Apple and Google were jockeying for position in the mobile advertising arena with high-profile acquisitions. Just last week, Intel threw everyone for a loop with its purchase of McAfee for $7.68 billion USD.

Now, we are witnessing Hewlett-Packard and Dell in a bidding war over 3PAR, a Fremont, California-based company that specializes in storage hardware solutions and accompanying storage management software. The company reported revenue of $194 million in fiscal year 2010. The company's net loss for FY 2010 was 3.2 million.

Dell presented a tender offer of $18 a share for 3PAR in a transaction valued at $1.15 billion (this represented an 87 percent premium on 3PAR's stock price at the time). However, HP has countered with a 33.3 percent premium at $24 a share which pushes the transaction price to $1.6 billion.

“HP’s proposal offers superior value to 3PAR’s shareholders. Our global reach, strong routes to market and commitment to innovation uniquely position HP as the ideal fit for 3PAR,” said Dave Donatelli, executive vice president and general manager, Enterprise Servers, Storage and Networking, HP. “We’ve seen great momentum with our Converged Infrastructure strategy, and 3PAR accelerates that strategy, particularly in cloud and scale-out markets.”

While HP's offer is incredibly generous, Reuters reports that HP's current lack of a permanent CEO -- thanks to former CEO Mark Hurd's hasty departure -- may make the decision a bit more murky for 3PAR. However, Donatelli was quick to swat down that speculation, commenting, "I have absolutely no concerns as it relates to this deal."

"HP is uniquely positioned to capitalize on 3PAR’s next-generation storage technology by utilizing our global reach and superior routes to market to deliver 3PAR’s products to customers around the world," said Shane Robison, HP's Executive Vice President and Chief Strategy and Technology Officer in a letter to the 3PAR board. "Together, we will accelerate our ability to offer unmatched levels of performance, efficiency and scalability to customers deploying cloud or scale-out environments, helping drive new growth for both companies."

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Why Dell?
By Suntan on 8/23/2010 12:43:28 PM , Rating: 3
HP makes sense, with their recent purchase of Palm (webOS makes use of cloud storage pretty heavily) it would appear that HP is looking to move into offering a lot of 'devices' that store info in the cloud.

But why would Dell want this? Are they trying to move away from being a manufacturer? Perhaps they are looking to expand on their streak...

-Suntan




RE: Why Dell?
By Taft12 on 8/23/2010 1:10:55 PM , Rating: 2
Like all Tier-1 PC makers, Dell's margins are thin to the point of non-existence on laptops and desktops, ESPECIALLY the consumer lines. Servers and services are much more profitable. They are trying to build those businesses and not concern themselves so much with marketshare. They probably won't ever get higher than #3 in the US again, but since there's no money in chasing that anyway it's not much of a concern.

The market is changing and obviously both these companies see this technology as a pretty important step.


RE: Why Dell?
By amanojaku on 8/23/2010 1:52:22 PM , Rating: 3
Actually, it makes more sense for Dell to buy 3PAR than it does for HP. 3PAR is already a competitor to HP's storage array line, so all HP would do would be to eliminate a small player when the real heavies are EMC, Hitachi, IBM and NetApp.

Dell, on the other hand, has nothing except EqualLogic. iSCSI is having a hard time competing, and EqualLogic was a small company, anyway. 3PAR is also a small company, but it brings to the table a skill set that Dell lacks: enterprise-level storage arrays.

Dell would not be leaving the hardware business; it would be the other way around, with Dell investing more heavily in selling hardware. The whole "cloud" concept is a misnomer as people are mixing up concepts.

In this case the "cloud" IS NOT a bunch of people paying a company to host their data on a public, Internet-connected, shared storage server. It IS a single business' cluster of storage controllers and disks. It can be configured to connect specific servers to specific physical disks or logical volumes (that can span any and all disks). The disks/volumes can be shared for clustering, and the storage supports RAID 0, 1, 5, 6, 10 and possibly more. Since the server-to-volume mapping occurs in the controllers the security risk would be there. However, the controllers are "dumb" and cannot be reprogrammed by the data ports the servers attach to. The interconnecting switches can be configured to allow only certain server adapter addresses on certain ports, as well. Additionally, the server adapters have fixed addresses that cannot be spoofed by a driver, unlike Ethernet, so the "cloud" (SAN) is actually secure. So secure that SAN is the de facto method of storage in an enterprise, hence the interest from Dell and HP.


RE: Why Dell?
By Taft12 on 8/23/2010 4:30:52 PM , Rating: 2
quote:
...the storage supports RAID 0, 1, 5, 6, 10 and possibly more.


JBOD? :)


By GeekBrains on 8/23/2010 1:23:02 PM , Rating: 2
quote:
Dell has signed an agreement to acquire 3PAR, a leading global provider of highly-virtualized storage solutions with advanced data management features, including dynamic tiering and thin provisioning, for multi-tenant cloud-computing environments. The transaction is valued at approximately $1.15 billion, net of 3PAR’s cash. Terms of the acquisition were approved by the board of directors of each company.

http://content.dell.com/sg/en/corp/d/secure/2010-0...




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