HP to buy security-software maker ArcSight for $1.5 billion
13 Sep 2010
After winning its 18-day bidding war with rival Dell for virtual data storage company 3PAR, Hewlett-Packard (HP), the world's largest computer company, today struck a deal to buy security-software maker ArcSight Inc for about $1.5 billion in cash.
The $114.2-billion turnover HP is offering $43.50 per share, a premium of a 24 per cent to ArcSight' 10 September closing price, valuing the security-software maker at $1.5 billion.
ArcSight is a leading global provider of cyber-security and compliance solutions. Its Enterprise Threat and Risk Management (ETRM) software enables businesses and government agencies to protect their computers from cyber-theft, cyber-fraud, cyber-warfare and cyber-espionage.
The acquisition will expand HP's software and security portfolio, accelerate growth and will be in position to provide customers the ability to proactively monitor real-time events, assess risks and respond quickly to threats, HP said in a statement.
''From a security perspective, the perimeter of today's enterprise is porous, putting enormous pressure on clients' risk and compliance systems,'' said Bill Veghte, executive vice president, Software and Solutions, HP. ''The combination of HP and ArcSight will provide clients with the ability to fortify their applications, proactively monitor events and respond to threats.''
The acquisition would also enable HP to expand its customer base through ArcSight's over 1,000 customer's globally including the world's leading corporations in every major industry, governments worldwide, and the majority of US intelligence, defence and civilian agencies.
''HP's acquisition of ArcSight will enable the creation of a new type of security solution, one that serves the modern enterprise,'' said Tom Reilly, president and chief executive officer, ArcSight.
''By combining ArcSight's Enterprise Threat and Risk Management Platform with HP's breadth of application development and operations management solutions, HP will be able to offer an integrated security platform that delivers broader visibility, deeper context and faster remediation of enterprise-wide security and risk-related events,'' he added.
ArcSight had put itself up for sale last month, which sent its stock price soaring as technology heavyweights like IBM, Oracle and EMC reportedly showed interest in the company.
As with the 3Par acquisition, (See: HP knocks out Dell for 3PAR with $2.4-bn bid) HP is paying a huge premium for ArcSight, which was trading below $20 in mid May 2010.
By overpaying for ArcSight, HP is basically shutting the doors for a counter bid from rivals, according to analysts.
HP's acquisition of ArcSight comes close after Intel agreed last month to buy McAfee, the world's largest dedicated security technology company McAfee for $7.68 billion. (See: Intel to acquire computer-security software maker McAfee for $7.68 billion)
ArcSight's customers include Defence Information Systems Agency, the US Securities & Exchange Commission, Verizon, Sumitomo, Bank of Tokyo-Mitsubishi, Cable & Wireless, the US Federal Reserve, Xerox, McAfee, Capital Blue Cross, the US Treasury and others.
The company had posted net income of $28.4 million on sales of $181 million in its fiscal year ended April.
ArcSight corporate headquarter is based in California, and has sales offices in the US, the UK, France, Canada, Latin America, Japan, and India.