Hewlett-Packard buying security software firm ArcSight for $1.5 billion
Hewlett-Packard Co. is continuing its recent spending spree by buying ArcSight Inc., a Cupertino, Calif., security software company, in a deal worth about $1.5 billion, the two companies confirmed Monday.
HP said it would pay $43.50 a share for the company, which makes software that detects intrusion attempts on big computer networks. The deal will help HP beef up its line of software for commercial computer systems, as it increasingly tries to sell a full range of hardware, software and tech services.
“The combination of HP and ArcSight will provide clients with the ability to fortify their applications, proactively monitor events and respond to threats,” HP Executive Vice President Bill Veghte said in a statement announcing the deal.
The deal is the latest in a series of big acquisitions that HP has negotiated in recent months. The Palo Alto company closed a $2.7-billion deal to buy networking company 3Com Corp. this year and a separate $1.2-billion deal to buy smart-phone maker Palm Inc. Last month HP agreed to buy Fremont, Calif., data-storage company 3Par Inc. for $2.4 billion after a hard-fought bidding war with Dell Inc.
Analysts say each of the acquisitions fills a niche in the company’s broader portfolio of products, but some have questioned whether HP paid too much in the recent deals. Financial analyst Aaron Rakers of the Stifel Nicolaus investment firm also noted that HP is searching for a new chief executive to replace Mark Hurd, who resigned unexpectedly last month.
Buying ArcSight makes sense in light of HP’s “overall enterprise strategy,” Nicolaus said in a note to clients Monday, but he added, “We believe [Wall Street] sentiment would likely rather see the company get a new CEO announcement behind them and look to digest some of the acquisitions it has recently or will be completing.”
ArcSight, which was originally funded in part with an investment from the Central Intelligence Agency venture fund In-Q-Tel, went public in 2008. The company has about 500 employees and reported a $28-million profit on $181 million in sales last year.
ArcSight’s stock was trading below $30 for most of the last year, but the price shot up in recent weeks amid reports that it was seeking a possible buyer, such as HP, Oracle Corp. or IBM Corp. The stock rose $8.81, or 25.1%, to $43.91 on Monday.
Bailey writes for the San Jose Mercury News/McClatchy.
