defa14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
3COM CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined): |
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Proposed maximum aggregate value of transaction: |
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Total fee paid: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
filing. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
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Filing Party: |
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Date Filed: |
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The following is an update to, and is hereby incorporated into, 3Com Corporations Definitive Proxy
Statement (the Proxy Statement) on Schedule 14A filed with the Securities and Exchange Commission
on January 25, 2008. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Proxy Statement.
Supplement to Background of the Merger and/or Reasons for the Merger; Recommendation of Our Board
of Directors
The Board of Directors considered Huaweis participation in the proposed transaction as a
factor in their recommendation of the Merger. The Board believed that Huaweis participation
increased deal certainty. The Board weighed certainty against the possibility that the strategic
alliance agreement among Bain Capital, Private Equity Partner One and Huawei, which provided for
Huaweis exclusive agreement until May 17, 2008 (or earlier, if Bain Capital were to abandon the
acquisition of 3Com) not to solicit, initiate, consider, encourage or accept any proposal or offer
from or to any third party to engage in any transaction similar to the acquisition of 3Com, might
diminish the potential that other private equity firms might seek to acquire the Company.
The Board of Directors considered Bain Capitals statement to the directors that the
TippingPoint division was not a strategic asset in Bain Capitals investment hypothesis as a factor
in their recommendation of the Merger, and that Bain Capital would accordingly bear all risk
associated with the valuation of the TippingPoint division in connection with any divestiture or
other disposition of the asset. In this respect, the Board considered that, on June 22, 2007, Bain
Capitals initial indication of interest in making a bid to acquire 3Com in a range of $5.25 to
$5.85 per share also included an alternate valuation methodology for a purchase of 3Com, excluding
the TippingPoint division, of $4.50 to $5.00 per share, in each case subject to obtaining financing
and conducting comprehensive due diligence.
Throughout the process engaged in by the Board of Directors, and with the Boards
authorization, Goldman Sachs or management contacted or engaged in one or more discussions with a
total of seven parties regarding a potential transaction with the Company, including four strategic
industry participants (including Strategic Party Two), and three prospective financial buyers
including Bain Capital, Private Equity Party One, and Private Equity Party Two.
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Supplement to Projected Financial Information
In addition to the projected financial information set forth on pages 34-36 of the proxy
statement, the following projected financial information relating to each of our three business
segments (H3C, DVBU and TippingPoint) and our non-operating Corporate/Eliminations segment for
our fiscal years 2008 through 2010 was provided to our board of directors, to Goldman Sachs to
facilitate Goldman Sachs financial analysis in connection with the Merger, and to the Investors
and to the advisors and financing sources of the Investors in connection with their consideration
of the Merger:
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H3C Business Segment |
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Fiscal Year ending May 31, |
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2008 |
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2009 |
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2010 |
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($ in millions) |
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Revenue |
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$ |
826.9 |
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$ |
949.0 |
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$ |
1,092.1 |
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Revenue growth |
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13 |
% |
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15 |
% |
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15 |
% |
Gross profit (non-GAAP) |
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$ |
399.2 |
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$ |
446.2 |
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$ |
513.1 |
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Gross profit margin (non-GAAP) |
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48.3 |
% |
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47 |
% |
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47 |
% |
Operating profit (non-GAAP) |
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$ |
118.0 |
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$ |
134.7 |
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$ |
163.8 |
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Operating profit margin (non-GAAP) |
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14 |
% |
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14 |
% |
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15 |
% |
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DVBU Business Segment |
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Fiscal Year ending May 31, |
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2008 |
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2009 |
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2010 |
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($ in millions) |
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Revenue |
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$ |
590.0 |
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$ |
709.1 |
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$ |
847.7 |
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Revenue growth |
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10 |
% |
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20 |
% |
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20 |
% |
Gross profit (non-GAAP) |
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$ |
188.6 |
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$ |
237.5 |
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$ |
292.6 |
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Gross profit margin (non-GAAP) |
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32 |
% |
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33.5 |
% |
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34.5 |
% |
Operating profit (non-GAAP) |
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$ |
(19.0 |
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$ |
(4.3 |
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$ |
25.6 |
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Operating profit margin (non-GAAP) |
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(3 |
)% |
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(1 |
)% |
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3 |
% |
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TippingPoint Business Segment |
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Fiscal Year ending May 31, |
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2008 |
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2009 |
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2010 |
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($ in millions) |
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Revenue |
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$ |
121.0 |
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$ |
158.3 |
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$ |
202.6 |
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Revenue growth |
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34 |
% |
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31 |
% |
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28 |
% |
Gross profit (non-GAAP) |
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$ |
82.3 |
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$ |
107.6 |
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$ |
137.8 |
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Gross profit margin (non-GAAP) |
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68 |
% |
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68 |
% |
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68 |
% |
Operating profit (non-GAAP) |
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$ |
14.0 |
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$ |
21.6 |
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$ |
33.3 |
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Operating profit margin (non-GAAP) |
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12 |
% |
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14 |
% |
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16 |
% |
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Consolidated |
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Fiscal Year ending May 31, |
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2008 |
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2009 |
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2010 |
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($ in millions) |
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Segment Revenue |
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$ |
1,537.9 |
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$ |
1,816.4 |
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$ |
2,142.4 |
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Eliminations (represents eliminations for
intercompany sales) |
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$ |
(131.1 |
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$ |
(191.8 |
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$ |
(229.3 |
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Consolidated revenue |
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$ |
1,406.8 |
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$ |
1,624.6 |
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$ |
1,913.1 |
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Consolidated revenue growth |
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12 |
% |
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15 |
% |
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18 |
% |
Consolidated gross profit (non-GAAP) |
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$ |
670.1 |
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$ |
791.3 |
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$ |
943.5 |
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Consolidated gross profit margin (non-GAAP) |
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48 |
% |
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49 |
% |
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49 |
% |
Segment operating profit (non-GAAP) |
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$ |
113.0 |
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$ |
152.0 |
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$ |
222.7 |
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Corporate functions |
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$ |
(44.0 |
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(28.5 |
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(26.0 |
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Consolidated operating profit (non-GAAP) |
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$ |
(69.0 |
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$ |
(123.5 |
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$ |
(196.7 |
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Consolidated operating profit margin (non-GAAP) |
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5 |
% |
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8 |
% |
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10 |
% |
The prospective financial information set forth above is subject to the qualifications and
assumptions set forth on pages 34 36 of the proxy statement. As noted in the proxy statement,
we do not as a matter of course make public projections as to future performance or earnings. We
have included the additional prospective financial information above in order to give our
stockholders access to this information. The prospective financial information above was prepared
for purposes of the boards consideration and evaluation of the Merger, to facilitate Goldman
Sachs financial analysis in connection with the Merger and to facilitate the due diligence review
of the Investors and their advisors and financing sources. The inclusion of the prospective
financial information above should not be regarded as an indication that our management team, our
board of directors, Goldman Sachs, the Investors or any other recipient of this information
considered, or now considers, it to be predictive of actual future results.
Our management team advised our board of directors, Goldman Sachs, the Investors and the other
recipients of the prospective financial information that its internal financial forecasts, upon
which the prospective financial information set forth above was based, were subjective in many
respects. The prospective financial information set forth above reflects numerous assumptions
(including the assumptions set forth on pages 34 -36 of the proxy statement) with respect to
industry performance, general business, economic, market and financial conditions and other
matters, all of which are difficult to predict and beyond the Companys control. The prospective
financial information set forth above also reflects numerous estimates and assumptions related to
our business that are inherently subject to significant economic, political and competitive
uncertainties, all of which are difficult to predict and many of which are beyond the Companys
control. As a result, although the prospective financial information set forth above was prepared
in good faith based on assumptions believed to be reasonable at the time the information was
prepared, there can be no assurance that the assumptions made in preparing such information will
prove accurate or that the projected results reflected therein will be realized.
The prospective financial information set forth above was prepared for 3Coms internal use,
for use by Goldman Sachs in preparing its financial analysis in connection with the Merger and for
use by the Investors and other potential purchasers of the Company and not with a view toward
public disclosure or toward complying with U.S. generally accepted accounting principles (GAAP),
the published guidelines of the SEC regarding projections or the
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guidelines established by the American Institute of Certified Public Accountants for preparation
and presentation of prospective financial information. Our independent registered public accounting
firm has not examined or compiled any of the prospective financial information set forth above,
expressed any conclusion or provided any form of assurance with respect to such information and,
accordingly, assumes no responsibility for such information. The prospective financial information
set forth above does not take into account any circumstances or events occurring since the date
such information was prepared or which may occur in the future, and, in particular, does not take
into account or give effect to the Merger or the proposed financing of the Merger, any revised
prospects of our business, changes in general business or economic conditions or any other
transaction or event that has occurred since the date on which such information was prepared or
which may occur in the future. Prospective financial information of this type is based on
estimates and assumptions that are inherently subject to factors such as industry performance,
general business, economic, regulatory, market and financial conditions, as well as changes to the
business, financial condition or results of operation of the Company, including the factors
described under Cautionary Statement Concerning Forward-Looking Information beginning on page 14
of the proxy statement. Since the prospective financial information set forth above consists of
multiple years, such information by its nature is subject to greater uncertainty with each
successive year.
We have made publicly available our actual results for the second quarter of the 2008 fiscal
year ended November 30, 2007. You should review our Quarterly Report on Form 10-Q for the quarter
ended November 30, 2007 to obtain this information. You are cautioned not to place undue reliance
on the specific portions of the prospective financial information set forth above. No one has made
or makes any representation to any stockholder regarding the information included in the
prospective financial information set forth above.
For the foregoing reasons, as well as the bases and assumptions on which the prospective
financial information set forth above was compiled, the inclusion of the prospective financial
information in this proxy statement supplement should not be regarded as an indication that such
information will be predictive of actual future results or events, and it should not be relied on
as such. Except as required by applicable securities laws, we have not updated nor do we intend to
update or otherwise revise the prospective financial information set forth above, including,
without limitation, to reflect circumstances existing after the date such information was prepared
or to reflect the occurrence of future events, including, without limitation, changes in general
economic or industry conditions, even in the event that any or all of the assumptions underlying
the prospective financial information is shown to be in error.
Additional Information
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As of the record date, Huawei Tech Investment Co., Ltd., an affiliate of Huawei,
beneficially held 7,800,920 shares of Common Stock, which represents under 2% of the Companys
total shares outstanding. |
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