3Com is announcing today it's being taken private by Bain Capital and partner Huawei Technologies for $5/share equaling around $2B. Sheds a little more light on 3Com making Tipping Point private too.
Some are guessing that Huawei with 3Com will cut costs to continue 3Com's cash generation capability and focus on the China markets. Possible, but I'd see 3Com as Huawei's entre into US markets and why lose ground on that, keep the 3Com train a runnin' and go after both markets, or more. There is some momentum to build on, as 3Com generated reasonable cash ($58m) at corporate 2007 year end but lost $89m on $1.27B in sales.
I believe 3Com still has a lot to offer the market and spinning off Tipping Point, getting the markets off their backs by going private, and some likely belt tightening will help them refocus and serve their customers. I wish them the best of luck in coming back as a stronger company.
Here's the analysis on 3Com. Just spoke with Eric.
http://sramanamitra.com/2007/09/28/3com-is-now-really-going-after-cisco/
Sramana
Posted by: Sramana Mitra | September 28, 2007 at 09:24 AM