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Dell to Acquire Perot Systems

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September 21, 2009 -- Computer maker Dell has announced its intention to acquire Perot Systems Corp. at an agreed price of $30 per share or $3.9 billion. The deal brings Dell a large provider of IT services primarily focused on health care and government and a platform for leveraging future product acquisitions.

The two companies already have an extensive services agreement and in a conference call said Perot CEO Peter Altabef will head a new services arm based on Dell hardware and services. Dell CFO Brian Gladden called the deal an “anchor acquisition” and said growth is the “primary motivation” for the merger.

An immediate opportunity for the companies is in leveraging Dell commodity hardware for the creation of captive or hosted data centers and virtualization services. 

Dell also commented that future plans could continue the diversification around servers and storage. CEO Michael Dell pointed to Internet SCSI storage provider EqualLogic, which Dell acquired in 2008, as a company that could be leveraged through an owned services arm and said other deals could follow. Dell said the two Texas-based businesses could grow faster when combined. 

Perot Systems’ two largest verticals are among those with the greatest industry growth. Health care and government already account for more than 70 percent of Perot revenues and provide a ripe market for cross-selling Dell products.
 
Large hardware providers have looked to leverage services to match the offerings of newly integrated vendors, as evidenced by HP’s acquisition of EDS. IBM, with its massive services arm is expected to test the market for integrated software services through its acquisition of predictive analytics provider SPSS.

Perot Systems reported $2.8 billion in 2008 revenue and has more than 23,000 employees globally.

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