3Par Rises on Takeover Speculation

3Par (NYSE: PAR) shares were on the rise today following an upbeat article in Barron’s that suggested that the data storage company could become a takeover target.

3Par made a name for itself by pioneering thin provisioning and developing a clustered storage architecture that the company claims can save users half on their storage costs. 3Par calls its technology “Utility Storage.”

The Barron’s article suggested that 3Par could be a beneficiary of renewed IT spending, and with $100 million in cash and little debt, it has weathered the Great Recession in fine shape. Analysts expect the company to grow revenues 22 percent to $236 million in its fiscal year ending March 2011, according to Thomson Reuters.

The Barron’s article suggested that 3Par’s focus on the high-end storage market could make it an attractive takeover target, but two analysts told Enterprise Storage Forum that they aren’t sure who would acquire the company.

Aaron Rakers of Stifel Nicolaus said NetApp (NASDAQ: NTAP) “makes the most sense” as a possible acquirer, but said the NAS pioneer “seems to downplay the need to enter into the high end of the storage market.”

HP (NYSE: HPQ) is another possibility, Rakers said, but he added that “they have a 10-year installed base of HDS systems to think about.”

Rakers ruled out EMC (NYSE: EMC) and IBM (NYSE: IBM) as possible acquirers.

Kaushik Roy of Wedbush Morgan had a similar view.

“In my opinion, the probability of either NetApp or HP or Dell or anyone else buying 3Par is very low,” Roy told Enterprise Storage Forum in an email. “Neither NetApp nor HP nor Dell would get anything that they don’t have or cannot get easily.”

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Paul Shread
eSecurity Editor Paul Shread has covered nearly every aspect of enterprise technology in his 20+ years in IT journalism, including an award-winning series on software-defined data centers. He wrote a column on small business technology for Time.com, and covered financial markets for 10 years, from the dot-com boom and bust to the 2007-2009 financial crisis. He holds a market analyst certification.

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