3Com (and TippingPoint) head to China in $2B cash deal

Summary:Computer networking giant 3Com has been sold for $2 billion in cash to Bain Capital and Chinese telco equipment group Huawei Technologies. The inclusion of 3Com's TippingPoint zero-day flaw broker will certainly raise eyebrows in government circles.

3Com (and TippingPoint) head to China in $2B cash deal
Computer networking giant 3Com has been sold for $2 billion in cash to Bain Capital and Chinese telco equipment group Huawei Technologies.

Bain, a private equity firm with headquarters in Mass., partnered with Huawei to offer $5.30 a share for 3Com (a 44% premium over the Sep. 27 closing price). The Wall Street Journal reports that Canada's Nortel Networks was in the running for the deal but walked away after Bain secured funding from China.

3Com (and TippingPoint) head to China in $2B cash deal

The Chinese connection is particularly interesting because 3Com owns TippingPoint, a subsidiary involved with the purchasing of zero-day security vulnerabilities. Back in June, 3Com said it would to spin off TippingPoint in an IPO but this new transaction could scuttle those plans.

[ SEE: TippingPoint heading for IPO door ]

It will also be interesting to see the reaction of the U.S. government to the 3Com acquisition. The issue of zero-day flaws in the wrong hands has been a sensitive topic lately with China at the center of accusations of hacking into Pentagon networks.

The governments of Germany and France have joined the U.S. department of defense in leveling claims that Chinese hackers have infiltrated their networks. It's not a stretch to imagine that the 3Com/TippingPoint deal will raise eyebrows in Washington.

Last year, Israeli software security firm Check Point aborted its plans to acquire Sourcefire after the CFIUS (Committee on Foreign Investment in the United States), started an investigation into the ramifications of key security technology being owned by an overseas firm.

Check Point cited "lengthy ongoing delays" and "the current climate for international acquisition" as the reasons for scrapping the deal.

Topics: Enterprise Software, Banking, Government, Government : US, Legal, Networking, Security

About

Ryan Naraine is a journalist and social media enthusiast specializing in Internet and computer security issues. He is currently security evangelist at Kaspersky Lab, an anti-malware company with operations around the globe. He is taking a leadership role in developing the company's online community initiative around secure content managem... Full Bio

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