3Com Acquires TippingPoint Technologies in $430 Million Deal

Strategic Insights -

3Com Corporation has signed an agreement to acquire TippingPoint Technologies, Inc. for approximately $430 million, expanding its portfolio of secure, converged voice and data networking solutions. The acquisition will enhance 3Com's enterprise-focused product portfolio and further demonstrate its commitment to delivering secure, converged networks. TippingPoint's award-winning Intrusion Prevention Systems (IPS) will be integrated into 3Com's global sales and service capabilities, providing customers with access to a robust and reliable security solution.

Key Takeaways:

  • 3Com has acquired TippingPoint Technologies, Inc. for approximately $430 million, with the total purchase price including acquisition costs and assumed options using the treasury method.
  • The acquisition strengthens 3Com's enterprise-focused product portfolio and enhances its ability to deliver secure, converged networks to the enterprise market.
  • TippingPoint's products, including its in-line, high-performance IPS solutions, will be integrated into 3Com's global sales and service capabilities.
  • The acquisition is subject to regulatory approval and approval by TippingPoint stockholders, and is expected to close in the 3rd quarter of 3Com's fiscal 2005.
  • TippingPoint CEO, Kip McClanahan, will assume the role of division president, reporting directly to 3Com CEO, Bruce Claflin.
  • TippingPoint's employees will continue to provide high-touch security expertise to customers while leveraging 3Com's global reach and infrastructure.
  • The acquisition expands 3Com's product portfolio and enhances its ability to deliver secure, converged voice and data networking solutions to the enterprise market.
  • TippingPoint's award-winning IPS solutions have been recognized for their excellent engineering and real-world performance, including the NSS Gold award and the IDG and Techworld.com Network Protection Product of the Year award.

Statistics:

  • The total addressable market for IPS is significant and growing each year, with in-line IPS being the fastest growing segment of the Intrusion Detection System / Intrusion Prevention System market, according to Infonetics Research.
  • The total purchase price for the acquisition is approximately $430 million, representing a 13 percent premium over the closing price of TippingPoint stock on December 10, 2004.
  • The acquisition is subject to regulatory approval and approval by TippingPoint stockholders, and is expected to close in the 3rd quarter of 3Com's fiscal 2005.
  • TippingPoint will operate as a division of 3Com, with TippingPoint CEO, Kip McClanahan, assuming the role of division president.
  • TippingPoint employs approximately 125 people, who will continue to provide high-touch security expertise to customers.

Sources:

  • 3Com Corporation press release, "3Com to Acquire TippingPoint Technologies" (December 13, 2004)
  • TippingPoint Technologies, Inc. press release, "TippingPoint and 3Com Announce Joint Acquisition Agreement" (December 13, 2004)
  • Infonetics Research, "Intrusion Detection System / Intrusion Prevention System Market Report" (2004)
  • NSS Group, "NSS Gold Award for Intrusion Prevention Systems" (2004)
  • IDG and Techworld.com, "Network Protection Product of the Year Award" (2004)