Dell Inc. is proposing to acquire Perot Systems Corp for about 3.9 billion U.S. dollars to expand its technology services business and compete with Hewlett-Packard Co. (HP) and International Business Machines Corp.(IBM), media reported on Tuesday.
Dell said on Monday it would pay 30 dollars per share for Perot Systems, whose Friday's closing price was 17.91 dollars. Goldman Sachs advised Perot Systems on the transaction. Morgan Stanley advised Dell.
J.P. Morgan analyst Mark Moskowitz said the price is 1.4 times Perot Systems' sales, a little expensive, compared with HP's purchase of EDS for 0.6 times sales last year, although it was good for Dell to lessen its dependence on personal computers.
"We do see the building block as being compelling, but the purchase price seems relatively rich," Moskowitz wrote in a research note.
Perot Systems, a computer services provider founded in 1988 by former U.S. presidential candidate Ross Perot, would be the largest ever acquisition by Dell.
The deal comes as large technology companies expand into higher margin IT services to secure stable and recurring revenue as computer hardware becomes cheaper.
"This acquisition makes great sense because of the obvious ways our businesses complement each other and enable us to grow profitably over time," Dell Chief Executive Michael Dell said.
Dell, which lags far behind HP and IBM in the services arena, is looking to buy a company with a strong focus on serving healthcare and federal government customers.
Dell is the world's No. 2 maker of PCs, with roughly 60 percent of its revenue coming from that market. The company has been trying to diversify its range of offerings, and services currently make up only around one-tenth of sales.
Given their substantial lead over Dell, neither Hewlett-Packard nor IBM will likely feel a broad challenge. But Dell's move could force the two companies to pay more attention to their own health-care and government sectors.
Source:Xinhua/Agencies
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