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Partners: Dell's Reported $10B Asset Sale Would Help Focus Company After EMC Buy

Partners say an asset sale would not only get the company some cash to help pay for the acquisition of EMC, but may also provide some clarity.

Dell's reported move to sell off some $10 billion in assets would not only get the company some cash to help pay for its EMC acquisition, but could also provide some clarity, partners said.

Dell is preparing to sell non-core assets in order to reduce the nearly $50 billion debt load it intends to take on as part of its proposed $67 billion acquisition of data storage giant EMC, according to a Reuters report citing unnamed sources.

The list of assets headed for the block includes Quest Software, SonicWall, AppAssure and Perot Systems, according to Reuters.

[Related: What Will A Merged Dell-EMC Look Like?]

EMC may also float its Pivotal unit in an IPO next year, according to a Re/code report. EMC would publicly offer a minority stake in big data software company Pivotal, which is a joint venture between EMC and GE, similar to the way it has handled VMware, according to the report.

Partners told CRN they'd welcome the asset sales. "I like the idea of them selling off the assets," Paul Neyman, president of Houston-based Dell partner Waypoint Solutions, told CRN. For example, Neyman said, EMC's data protection solutions could make AppAssure and certain Quest tools "a bit redundant."

"For us, it's really one less thing we have to maintain in our offering to stay aligned with Dell," Neyman said. "I think it would give Dell more focus on adopting where EMC is successful rather than trying to incorporate or position multiple offerings."

The relative absence of overlap between Dell and EMC has been a key talking point for executives from both companies. But the units Dell is said to be selling off do overlap with EMC.

For example, in a merged Dell-EMC, AppAssure would be covered by EMC's Networker and Avamar. Quest Software would also be covered by Networker, as well as by Avamar and RecoveryPoint. Dell's SonicWall capabilities would be covered by RSA.

The acquisition, which is expected to close between May and October 2016, would be perhaps the biggest in tech industry history and would create an $80 billion global IT powerhouse.

In announcing the deal, Michael Dell, founder and CEO of the company he started in his college dorm room, said the company would focus on quickly reducing the debt it takes on in order to complete the transaction, similar to the way it has aggressively paid down the debt used to take the company private in a $25 billion deal in late 2013.

Dell will pay $24.05 in cash per share for EMC and will also give EMC shareholders "tracking stock" in VMware worth a little over $9 a share when the deal was revealed last month. At the time, EMC shares were worth $33.15, but were hovering around $26.21 Tuesday.

PUBLISHED NOV. 3, 2015

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