DOW JONES NEWSWIRES
Dell Inc. (DELL) agreed Monday to buy information-technology
service provider Perot Systems Corp. (PER), long seen as a Dell
target, for $3.9 billion as the world's No. 2 computer seller looks
to diversify away from its core personal-computer business.
The acquisition broadens Dell's current services offerings,
creating a company with $8 billion in services revenue, and seeks
to better position Dell among its more diversified rivals like
Hewlett-Packard Co. (HPQ)
"This deal significantly expands Dell's enterprise-solutions
capabilities and makes Perot Systems' strengths available to even
more customers around the world," said Michael Dell, Dell's
chairman and chief executive.
Dell will begin a tender offer to buy all the class A shares of
Perot for $30 a share, a 68% premium to Perot's closing price
Friday of $17.91. The deal is expected to close by the end of
January but isn't seen adding to Dell's earnings until fiscal 2012.
Dell reported the second quarter of its fiscal 2010 last month.
In premarket trading, Dell fell 3.8% to $16.05, and Perot
Systems added 66% to $29.69.
The move follows months of speculation as to whom Dell, which
had $11.7 billion in cash as of July 31, would buy in order to fill
gaps or strengthen weak spots in its business products
portfolio.
The talk increased this summer after Dell hired David Johnson,
the former chief of mergers-and-acquisitions strategy at
International Business Machines Corp. (IBM), which tried
unsuccessfully to block the hiring in courts.
With Perot, Dell will be able to bolster Dell's
information-technology services portfolio and expand Perot's reach
farther across the globe. Perot had been seeking to expand
internationally to reduce its exposure to the U.S., and the two
companies already partner on some projects.
Perot will become Dell's services unit and will be led by its
current chief executive, Peter Altabef. Also, Dell's board will
consider Perot Chairman Ross Perot Jr. for a seat.
Last month, Perot said its second-quarter profit rose slightly
thanks to improved margins despite a drop in sales, but it gave a
third-quarter revenue forecast below analysts' expectations.
Meanwhile, Dell posted a 23% profit drop last quarter as it
continues to suffer from weak spending in technology.
Nearly 80% of Dell's revenue comes from corporate computer
buying, and they have been retrenching amid slumps in their own
businesses.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com
(George Stahl contributed to this report.)