Dell has announced it will buy technology services company Perot Systems for $3.9 billion, or $30 per share. The New York Times’ DealBook reports:
Dell and Perot Systems, which was founded in 1988 by H. Ross Perot, said that the terms of the deal had been approved by the boards of both companies. Perot Systems, which had revenue last year of $2.8 billion, will become Dell’s services unit and be led by Peter Altabef, the Perot Systems chief executive. Ross Perot Jr., the chairman, is expected to join the Dell board.
The combined heft of Perot Systems and Dell’s own services organization should result in about $8 billion of services revenue annually, according to Dell’s statement. Services deals tend to have far higher margins than selling things like PCs and computer servers.
Since its overall business has slowed significantly in recent years, Dell has been exploring more profitable growth areas. It has been slowly building up its own services division through smaller acquisitions over the last two years. It has claimed to offer lower-priced services than its larger rivals and India-based services firms.
But the acquisition of Perot Systems now places Dell in much the same arena as its competitors.
The deal will close during or after the fourth quarter of this year, according to ZDNet.
Digital Daily comments on the purchase:
An interesting move. While there had been speculation that Dell was looking to acquire a handset company like Palm, it seems it was far more interested in boosting its enterprise business by acquiring an outsourcer like Perot.