The fall of 3Com
How the mighty have fallen! 3Com was one of the darlings of the American dot-com boom, a rival of Cisco, a company that bought the naming rights to San Francisco's famous Candlestick Park, the football and (then) baseball stadium.
3Com announced that it has agreed to a takeover, led by equity buyer Bain Capital and with a significant portion taken by Chinese rival Huawei Technologies. The deal was for $2.2 billion, nothing to scoff at, but far less than the valuation of the company during its heyday--$29.5 billion in 2000. 3Com, in fact, hadn't made a profit in the last seven years, as its market share has steadily eroded,
Huawei, which also makes networking equipment, has emerged as the big rival to Cisco. In fact, 3Com had been involved in a significant joint venture with Huawei, terminated earlier this year. In fact, according to Bloomberg, the joint venture (Huawei-3Com) provided over half of 3Com's profit last year, mostly from devices sold in China.
It's been a big year for tech buyout, according to a Bloomberg article ("3Com Agrees to $2.2 Billion Takeover Offer From Bain", 9/28/07), "Buyout firms have announced 118 acquisitions of technology companies this year, valued at $59.5 billion, according to data compiled by Bloomberg. That compares with 147 deals valued at $29.3 billion in all of 20." Other network equipment companies acquired by equity firms this year include the US's Avaya (an $8.2 billion deal) and Enterasys (a $386 deal).
The Huawei move was a surprise, according to some analysts. The company ma be maneuvering too get a foothold in North America, and to perhaps make use of the 3Com brand name, for what it is worth.
9:49:31 PM 
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