LONDON Private equity group Bain Capital has teamed with Chinese equipment vendor Huawei to acquire, for $2.2 billion in cash, computer networking group 3Com.
The price of $5.30 a share represents a 44 per cent premium to 3Com's closing share price of $3.68 on Thursday (Sept. 27).
Bain is understood to be taking an 80 per cent stake in the buy-out vehicle, with the remainder acquired by Huawei.
There were reports in July that Silver Lake Partners and Bain Capital have approached 3Com, and also suggestions that Nortel Networks was also interested in the company.
Although 3Com has lost money for three straight years, its losses have narrowed with its stated commitment to retake the number 2 spot behind Cisco.
Edgar Masri, 3Com president and chief executive, said: "We believe that this agreement better positions 3Com to establish itself as a global networking leader, which will benefit our employees, our customers and our partners."
The deal is expected to be completed by the first quarter of 2008, subject to shareholder and regulatory approval.
3Com (Marlborough, Mass.) previously operated a joint venture with Huawei in China called Huawei-3Com Ltd., but 3Com bought out its partner earlier this year. The venture was started in 2003.
Huawei is largest maker of network-equipment in China. The company is increasingly competing in both Europe, Asia and the U.S. for business with traditional players such as Cisco Systems Inc., Alcatel-Lucent and Nortel Networks.