3Com Corporation (NASDAQ: COMS), a network hardware and software provider for corporations, announced today that it has agreed to be sold to Bain Capital Partners LLC with Huawei Technologies Corporation, China's largest networking company, taking a minority stake of 3Com in the deal.

The all-cash deal values 3Com at $2.2 billion or about $5.30 per share, a premium of more than 40% over yesterday's closing price of $3.68.

In a statement, Edgar Masri, President and CEO of 3Com, said "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."

3Com has a pre-existing relationship with Huawei, as they had operated a joint venture together in China since 2003. The jointly held company, called Huawei-3Com Ltd., performed exceptionally well, helping boost revenue for 3Com some 60% last year.

Even with a foothold in the Chinese market, 3Com has struggled to compete against bigger players like Cisco Systems Inc. (NASDAQ: CSCO) and Nortel Networks (NYSE: NT). In the face of such tough competition, Masri said that the board and management "have thoroughly reviewed our strategic alternatives and have determined that the agreement with Bain Capital provides the best value for 3Com shareholders."

Shares of 3Com are up more than 30%, to nearly $5 a share, on news of the deal.

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