Dell continues its march beyond the personal computer and into the services arena, reaching an agreement with Perot Systems to buy the systems integrator for $3.9 billion.
The Round Rock, Texas-based computer maker will pay $30 per share for Perot Systems with the deal expected to close sometime in Dell's November-January fiscal quarter.
The deal has been approved by both companies' boards of directors, but is subject to approval by government regulators. According to the companies, Perot Systems, number 51 on the 2009 VAR 500 list, will become Dell's services unit and be headed by Peter Altabef, currently the CEO of Perot Systems, based in Plano, Tex.
"We consider Perot Systems to be a premium asset with great people that enhances our opportunities for immediate and long-term growth," Michael Dell, CEO of Dell, said in a statement. "This significantly expands Dell's enterprise-solutions capabilities and makes Perot Systems' strengths available to even more customers around the world. There will be efficiencies from combining the companies, but the acquisition makes such great sense because of the obvious ways our businesses complement each other."
The acquisition will significantly expand Dell's services offerings and better position the number two computer maker to compete with both Hewlett-Packard's and IBM's services units. The purchase also raises the specter of channel conflict among solution providers who are already somewhat suspicious of the channel conflict that Dell brings to the table.
Perot Systems was founded in 1988 by former presidential candidate Ross Perot.
Ironically, Dell rival HP greatly expanded its services capabilities in 2008 for $13.9 billion when it acquired EDS which Perot started before leaving and starting Perot Systems.
"This transaction represents a great opportunity for our company and our associates," said Ross Perot Jr., son of the company's founder and today chairman of the company's board. "Today's announcement is the next step in formalizing a relationship that has flourished for some time. When my father founded Perot Systems he envisioned a global information-technology leader. The new, larger Dell builds on that promise and its own successes by taking Perot Systems' expertise to more customers than ever."
Dell shares were down 74 cents or four percent to $15.95 in pre-market trading this morning. Perot Systems' shares, which closed Friday at $17.91, were trading just below the offer price of $30 in pre-market trading, up 66 percent or $11.78 to $29.69.