Computer major Dell is packing off its own IT services division to NTT Data, the IT services branch of Japan based NTT for a sum of $3.05 Billion. The move comes amid speculations that Dell may just have ended up selling the division off for significantly less than what it could have got for it, due to time constraints.
Yup. Dell’s IT services division, although not as well known as say it’s laptops, has played a significant role in the company and the selling price certainly has many people scratching their heads.
The division was formed in the aftermath of Dell’s $3.9 billion acquisition of Perot Systems in 2009 — and its probably a fair bet to say that it has since then, increased in value. Which brings the value of the deal between Dell and NTT, into question.
Apparently, the bid started off with an asking point in the range of $5-$6 Billion for Dell systems. However, increasing pressure to generate money to help finance the debt undertaken by Dell to facilitate its recent, $67 Billion EMC acquisition, seems to have overridden all other concerns.
Which leaves NTT in possession of Dell systems for the relatively cheaper sum of $3.05 Billion. Considering that $3 Billion seems like a drop in the bucket in face of the EMC deal — Dell looks to have been a tad desperate in its attempts to raise funds.
Meanwhile, NTT is sticking to its strategy of expanding into new regions through a string of acquisitions and the like. The company already has a footprint in South America and the US, courtsey its acquiring Dimension Data and Keane Inc. respectively.
The Dell systems deal can be expected to further secure NTT’s foothold in the northern American continent. Meanwhile, the former has received a push on its path of paying out the massive, $40 Billion debt it incurred while acquiring EMC.
The deal, as per an EMC statement, could make Dell and EMC the world’s largest privately controlled, integrated technology company. However, it seems to be costing the company dear in terms of its other assets, and Dell may just be seen selling more of them in the future.
Although we do hope that it manages to avoid being short charged in the future.