HP finally lands 3PAR bidding war with $2.4bn offer

 

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By Reuters

Posted on 3 Sep 2010 at 11:01

HP has finally won the bidding war to buy data storage company 3PAR, with a $2.4 billion bid forcing rival Dell to bow out.

HP raised its cash offer by $3 to $33 per share, beating Dell's $32-a-share offer and ending an escalation of bids that many analysts said had gone too far.

The deal values 3PAR at over eight times its sales, and many analysts said that was too high for a company that has barely made a profit since it was founded in 1999. Multiples above five times sales are considered lofty in technology deals.

Others, however, say 3PAR is worth it. The company competes with bigger rival EMC in data storage, considered a key element of cloud computing.

"Do I think it was an extremely rich valuation? Absolutely. But I think, given that it's all cash, it shouldn't take too long for it to be accretive," said Stifel Nicolaus & Co analyst Aaron Rakers. "The question is, what kind of revenue synergy assumptions are they making?"