Bloomberg reports that Aruba Networks Inc., the wireless infrastructure technology vendor, could be acquired by Hewlett-Packard Co.
The purchase could be officially announced the next week. This would be the largest acquisition made by Hewlett-Packard in the last years, as until now the CEO Meg Whitman was focused on cutting costs and returning the business to growth.
Aruba’s market value is about $2.5 billion. It recorded revenues of $208 million for the first quarter, and its annual sales are projected to grow to more than $1 billion by 2017, a 29 percent year-on-year rise. In 2013, Aruba acquired the mobile mapping startup Meridian for $23 million.
It’s a hot market as evidenced by Aruba Network’s own growing revenues, and could become even bigger as businesses switch to Wi-Fi to ease the pressure on cellular networks.
Aruba would be a small addition to Hewlett-Packard’s overall business. HP’s market capitalization is $70.22 billion. HP reported sales for the first quarter of $26.8 billion. Hewlett-Packard’s poor-performing networking group contributed $562 million in sales for the company’s first quarter, down 11 percent from the year-earlier period.
Assuming the deal does go through, it’s likely that Aruba Networks would be absorbed into the new Hewlett-Packard Enterprise company that’ll be born later this year. HP is preparing to split into two listed companies, separating its computer and printer businesses from its corporate hardware and services operations.
Ruckus Wireless Inc shares, meanwhile, have risen 5 percent in response to the rumor.