MARLBOROUGH, Mass. -- 3Com Corporation (NASDAQ: COMS - News) today reported consolidated financial results for its third quarter of fiscal year 2007, which ended March 2, 2007, including the results for its two operating segments, SCN and H3C.
Additionally, 3Com today announced the receipt of final approval from the People's Republic of China for 3Com to acquire Huawei Technologies' 49 percent stake in H3C for $882 million. 3Com, which won the right to acquire the remaining stake in H3C through a bidding process that ended on November 28, 2006, anticipates the deal will officially close on or about March 29, 2007.
To fund the transaction and related expenses, 3Com intends to use approximately $470 million of cash from its balance sheet and approximately $430 million from a senior secured bank loan at its H3C segment.
"The company continued to make progress against our operational initiatives in the third quarter, highlighted by delivering non-GAAP operating profitability for the second consecutive quarter," said Edgar Masri, 3Com President and Chief Executive Officer. "3Com has delivered against each of the five areas we told investors to hold us accountable for, including receiving approval for the H3C transaction, improving the performance of our SCN business unit, signing retention agreements with key members of H3C's leadership team, and delivering on our new Open Services Networking strategy and a network access control solution from TippingPoint.
"Upon closing the H3C acquisition, we believe 3Com will be the clear number two vendor in the market for secure, converged networking solutions. 3Com is executing aggressively against a product strategy that we believe highly differentiates the company and provides a unique value proposition for our customers and partners. We are confident that our continued focus on operational improvements, top and bottom line leverage, and execution against our OSN strategy will drive improved shareholder value over time."