According to the Wall Street Journal [subscription required] Marlborough, MA-based 3Com Corp. (NASDAQ: COMS) is going private with the help of Bain Capital and Huawei Technologies for more than $2 billion -- or $5.50 a share. 3Com is up 34% to $4.94 in pre-market.

3Com has been hobbled for most of this decade but it has a storied history. Its founder invented Ethernet -- a way for computers to share information. It bought a company that made a very popular modem during the era when people dialed up the Internet on a telephone line. And with this acquisition came a technology which became the Palm Pilot -- a Personal Digital Assistant (PDA) which was an indispensable appendage for dot-commers in the 1990s.

Unfortunately, 3Com's financial position was weak -- it lost $89 million on $1.27 billion in sales in the year ending June 2007 but it generated $58 million in cash. It couldn't maintain its technology lead and it was surpassed by competitors in all its markets.

I am not sure how Bain Capital and Huawei Technologies expect to get a return on their investment. However, its ability to generate cash in the most recent year suggests that a combination of cost cutting and entry into new markets could make it a profitable investment.

Regardless -- if I owned 3Com stock -- which has lost 20% of its value in the last year -- I would be happier today.

Peter Cohan is president of Peter S. Cohan & Associates,. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.