3Com to acquire TippingPoint Technologies

Enterprise network infrastructure provider 3Com agreed this week to acquire relative newcomer TippingPoint Technologies, an intrusion prevention provider with carrier-class aspirations, for approximately $430 million in cash.

3Com will pay about a 13% premium on the publicly traded TippingPoint’s stock at $47 per share. With the cash it picks up as part of the deal, the out-of-pocket payment will be closer to $430 million.

Austin, Texas-based TippingPoint’s network-based Intrusion Prevention System (IPS), UnityOne, delivers in-depth application protection, infrastructure protection and performance protection for corporate enterprises, government agencies, service providers and academic institutions. It also will provide bandwidth management and content-based quality of service at gigabit speeds. The bandwidth management solution helps prioritize traffic while the quality-of-service component helps identify high-priority traffic. The company launched its UnityOne Intrusion Prevention Systems for VoIP this June.

"The IPS market is an emerging and fast-growing space addressing issues that are top-of-mind for CIOs," said Bruce Claflin, 3Com CEO. He added that 3Com would be able to leverage the best assets of both companies from day one and that over time, the company would develop lower cost, strength-of-defense and easy-to-install solutions.

TippingPoint will operate as a division of 3Com with TippingPoint CEO Kip McClanahan assuming the role of division president, reporting directly to 3Com CEO, Bruce Claflin. TippingPoint is headquartered in Austin, Texas, and employs approximately 125 people.

McClanahan’s previous venture, BroadJump, merged with Motive in November of 2002. He said this acquisition was a real win for his company, its employees and for 3Com.

"We needed reach. This allows us to extend our reach and leverage 3Com’s global services and support to bring our products to a much wider market," McClanahan said.

The acquisition strengthens 3Com’s enterprise-focused product portfolio and its ability to deliver secure, converged networks. Additionally, TippingPoint’s early leadership and expertise in securing and optimizing IP Telephony complements 3Com’s VoIP portfolio.

"Our strategy is to be the leading provider of secure, converged network solutions and security is essential to being able to deliver convergence," Claflin said.

Claflin also said that the IPS market is expected to grow over 75% for the next five years while 3Com’s other markets are expected to grow by about 6%.