HP acquired 3Com in a US$2.7 billion cash deal intended to “disrupt the networking industry,” according to executive vice president Ann Livermore. She told the Wall Street Journal the purchase would enable HP to take on Cisco Systems in the enterprise data center space.

“What we’ve been missing is networking for the core of the data center. That’s where Cisco is strong, and before, HP couldn’t attack that,” she said. The price tag represents a 39% premium to 3Com shares as of yesterday and finally sees the company changing hands after a $2.2 billion deal with Huawei Technologies and Bain Capital fell
apart under US federal review last year.

The acquisition gives HP a host of routing and switching solutions likely to augment its existing cloud strategy. The supplier also gains control of the TippingPoint network security portfolio, deployed in an estimated 30% of the Fortune 1000. HP said the deal would dramatically boost its Chinese business, including the absorption of a sizable mainland R&D team. The purchase is expected to slightly ding fiscal 2010 earnings, although HP declined to elaborate.

3Com CEO Bob Mao said HP offered the scale to “expand our global opportunity.” HP spun the takeover as a disruptive blow to Cisco. “By acquiring 3Com, we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry,” HP enterprise services general manager Dave Donatelli said in a statement. “By combining HP ProCurve offerings with 3Com’s extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center.”

But the sale could come under federal scrutiny after Silicon Alley Insider raised the alarm on suspicions of insider trading. The outlet said 3Com’s stock chart displayed irregularities ahead of the announcement, while its $5 strike calls spiked at 4,000 ahead of the news after weeks cycling below the 100 mark. The same irregularities were noted by PE Hub, sparking blog chatter the Securities and Exchange Commission might investigate the deal.

HP supplemented the announcement with a fiscal 4Q earnings preview. The vendor said revenue dipped 8% to $30.8 million but profit beat expectations to hit $1.14 per share.

Patrick Neighly