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3Com Expands Networking Reach with Acquisitions of Primary Access and Sonix Communications

Strategic Insights

— 1 min read

Data networking leader 3Com Corporation has made significant moves to expand its reach into new markets with the acquisition of Primary Access Corporation, a leading provider of integrated remote access systems, and Sonix Communications Limited, a leading UK-based ISDN internetworking company. These acquisitions mark a strategic shift for 3Com, enabling the company to significantly extend its networking reach beyond the enterprise and tap into rapidly growing markets for managed data services, small office/home office (SOHO) networking, and Internet access.

Key Takeaways:

  • 3Com acquires Primary Access Corporation for approximately $170 million in 3Com stock and Sonix Communications Limited for approximately $70 million in 3Com stock, which are expected to close in the fourth fiscal quarter.
  • The acquisitions of Primary Access and Sonix will enable 3Com to provide high-performance, fully integrated access products for the public switched data market and push out the periphery of the networks to the growing small business, commercial, and home Internet access markets.
  • With these acquisitions, 3Com is now the only company to offer data networking and network access solutions for the enterprise, carriers, and small office/home office.
  • Primary Access Corporation has revenues of $26.5 million in fiscal 1994 (ended September 30), and its products are used at network providers' central sites to deliver a dial-up connection linking users of on-line information over the public switched telephone network.
  • Sonix Communications Limited has grown quickly, reaching approximately $25 million in revenues for the last twelve months, and has already achieved ISDN market leadership in the UK with 46 percent market share in 1994.
  • 3Com Primary Access, with 120 employees, will remain based in San Diego, while 3Com Sonix, with its 53 employees, will remain in Cirencester, Gloucestershire.

Statistics:

  • The acquisitions will issue approximately 4.3 million shares to the owners of Primary Access and Sonix.
  • Primary Access Corporation had revenues of $26.5 million in fiscal 1994 (ended September 30).
  • Sonix Communications Limited has reached approximately $25 million in revenues for the last twelve months.
  • 3Com Primary Access has 120 employees, while 3Com Sonix has 53 employees.
  • Sonix has captured 46 percent of the UK's ISDN internetworking market in 1994 according to Dataquest.

Sources:

  • 3Com Corporation press release, October 26, 1995
  • Primary Access Corporation product brochures and investor relations materials
  • Sonix Communications Limited press releases and product brochures

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