John Paczkowski

Recent Posts by John Paczkowski

HP: Haven’t Found a New CEO Yet, Might As Well Buy Another Company

[Update: HP has indeed agreed to acquire ArcSight for $1.5 billion.]

Mark Hurd’s ouster from Hewlett-Packard (HPQ) hasn’t slowed the company’s recent spending spree. In August, HP acquired security-software company Fortify for an undisclosed sum. Shortly afterward it snatched data-storage vendor 3Par away from Dell after a hard-fought bidding war.

Now HP’s M&A team has set its sights on another acquisition: ArcSight (ARST). People familiar with the matter say that HP is close to announcing a deal to buy the security-software maker. The rumored price: $1.5 billion, a nice 25 percent premium over ArcSight’s $1.21 billion market value based on its closing stock price last Friday. A deal could be announced within days.

ArcSight’s speciality is network-intrusion detection and its client list includes government agencies as well as financial services and healthcare companies. Were HP to acquire it, it would do much to bolster its portfolio of security and network offerings as it looks to further expand into those high-margin businesses.

But a deal isn’t a sure thing. Talks with HP are said to be ongoing and presumably ArcSight does have other suitors knocking on its door–particularly after Intel (INTC) signaled the coming consolidation of the security market with its $6.8 billion acquisition of McAfee.