HP to buy security software provider for $1.5 billion

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By Michael J de la Merced, New York Times | Updated: 5 June 2012 02:24 IST
Highlights
  • The computer maker Hewlett-Packard said Monday that it would buy ArcSight, a maker of security software, for about $1.5 billion as it continues its recent buying spree.
The computer maker Hewlett-Packard said on Monday that it would buy ArcSight, a maker of security software, for about $1.5 billion as it continues its recent buying spree.

The deal is expected to close by the end of the year, HP said in a joint statement with ArcSight on Monday.

As it seeks to resume business after the contentious departure of its former chief executive, Mark V Hurd, HP again has shown little timidity about paying up for acquisitions. At 43.50 a share, the potential deal would represent a 25 percent premium over ArcSight's market value of $1.2 billion on Friday.

HP has sought to show that it is back to business as usual after the ouster of Mr. Hurd over violations of its business conduct code, which involved the hiring of an actress-turned-marketer. Mr. Hurd has since moved to a major rival, Oracle, as a co-president, prompting a lawsuit by HP alleging that the executive is breaking confidentiality clauses in his contract.

The ArcSight deal comes only two weeks after HP defeated Dell in a heated bidding war for 3Par, a data storage company. HP ultimately agreed to pay about $2 billion for 3Par, well above the $1.15 billion Dell initially offered for the company.

HP and its rivals have been eager to grow beyond the low-margin business of assembling and selling computers. (While serving as HP's chief executive, Mr. Hurd oversaw deals like the $13.9 billion purchase of Electronic Data Systems to help the company build a business to compete with offerings from companies like IBM)

Winning 3Par gave HP an expanded presence in the increasingly popular world of cloud computing, which depends on access to copious amounts of data storage.

Buying ArcSight will bolster HP's security and network offerings. The company makes products that help governments and businesses monitor their data networks for suspicious activity.

ArcSight, based in Cupertino, California, reported $181.4 million in revenue and $28.4 million in net income for its most recent fiscal year. The company, founded in 2000, has 512 employees. It counts more than 1,000 customers around the world, including Verizon and the Securities and Exchange Commission.

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Further reading: hewlett packard, hp
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