By Lisa Kerner
Charlotte, N.C., Sept. 28 - 3Com Corp. agreed to be acquired by affiliates of Bain Capital Partners, LLC for $5.30 cash per share, or some $2.2 billion.
The per-share price is a 44% premium over 3Com's closing price of $3.68 on Sept. 27, according to a company news release.
3Com's board of directors unanimously approved the merger, which is expected to close in the first quarter of 2008.
The agreement contains termination rights for both 3Com and Bain's affiliates, a form 8-K filing with the Securities and Exchange Commission stated. Depending on the circumstances, 3Com would be required to pay a termination fee of $66 million plus expenses up to $10 million. Bain's affiliates could pay a termination fee of $66 million or $110 million.
"The 3Com board of directors and senior management team have thoroughly reviewed our strategic alternatives and have determined that the agreement with Bain Capital provides the best value for 3Com shareholders," 3Com president chief executive officer Edgar Masri said in the release.
"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."
As part of the transaction, affiliates of Huawei Technologies will acquire a minority interest in the company and become a commercial and strategic partner of 3Com, the release stated.
Bain received financing commitments from Citigroup Global Markets Asia Ltd., UBS AG, the Hongkong and Shanghai Banking Corp. Ltd., ABN Amro Bank NV and Bank of China (Hong Kong) Ltd.
3Com was advised by Goldman, Sachs & Co., which also provided a fairness opinion to the company. Bain is being advised by Citigroup Global Markets, Inc. and UBS Securities LLC.
Bain is a global private investment firm based in Boston.
3Com, located in Marlborough, Mass., provides secure, converged voice and data networking solutions.
| Acquirer: | Bain Capital Partners, LLC
|
| Target: | 3Com Corp.
|
| Price per share: | $5.30
|
| Transaction total: | $2.2 billion
|
| Termination fee: | $66 million, $110 million
|
| Announcement date: | Sept. 28
|
| Expected closing: | First quarter 2008
|
| Stock price for target: | Nasdaq: COMS: $3.68 on Sept. 27
|
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