3Com to Be Acquired by Bain Capital for $2.2 Billion

3Com, a maker of networking hardware and software, will be sold to affiliates of private equity firm Bain Capital Partners for $2.2 billion in cash, 3Com said Friday.

Shareholders will receive $5.30 in cash for each share of 3Com stock, or a premium of about 44 percent over the stock's $3.68 closing price on Thursday.

Shares rallied roughly 36 percent to about $5 -- within range of the reported purchase price.

3Com said its board had unanimously approved the deal, and recommended shareholders approve it.

3Com's board and senior managers "have thoroughly reviewed our strategic alternatives and have determined that the agreement with Bain Capital provides the best value for 3Com shareholders," said Edgar Masri, president and chief executive of Marlboro, Mass.-based 3Com. "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."

Although Boston-based Bain Capital is the buyer, affiliates of China-based Huawei Technologies will acquire a minority interest in 3Com and become a commercial and strategic partner, 3Com said.

The transaction is expected to close in the first quarter of next year, subject to shareholder and regulatory approvals.

Trading of 3Com shares was halted early Friday after the Wall Street Journal reported on its Web site that 3Com planned to announce a sale to Bain and Huawei later in the day.

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