Dell Inc. (DELL), which is trying to hold onto its shrinking share of the PC market, today agreed to acquire information technology services company Perot Systems Inc. (PER) for about $3.9 billion. The addition of Perot would allow the computer maker to add services such as IT consulting geared toward businesses to its existing product offerings.
The acquisition is similar to IBM's (IBM) purchase of PricewaterhouseCoopers Consulting for $3.5 billion in 2002, and addresses Dell's dependence on hardware such as laptops and PCs, which are facing increased competition from cheaper machines including netbooks. The companies expect the transaction to be accretive to Dell's GAAP earnings in its fiscal 2012.
"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," said Dell CEO Michael Dell in a press release.
The $30 per share cash offer is expected to close in Dell's November to January quarter. Over the past four quarters, Dell and Perot Systems had a combined $16 billion in enterprise-hardware and IT-services revenue, with about $8 billion from enhanced services and support.
Ross Perot Jr., the chairman of Perot Systems, is expected to be considered for a spot on Dell's board once the transaction closes. Perot, based in Plano, Texas, will continue to be run by CEO Peter Altabef.
Shares of Round Rock, Texas-based Dell have soared more than 60 percent this year as investors bet that companies and individuals would begin replacing aging computers as the economy begins to rebound. CEO Dell has outsourced 40 percent of the company's manufacturing in a quest to save $4 billion a year.
Dell fell 75 cents, or 4.49 percent, to $15.94, in pre-market trading. Perot Systems, the second company founded by billionaire H. Ross Perot in addition to Electronic Data Systems, soared $11.78, or 65.8 percent, to $29.69.
Take the first steps to building your portfolio.View Course »