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Speculation: Dell SonicWall Prepped for Sale, WatchGuard Merger?

Admittedly, this blog entry deserves to be labeled “speculation.” Still, circumstantial evidence suggests the Dell SonicWall security business could wind up sold and merged with WatchGuard, another well-known firewall provider.

Where’s the evidence? The bread crumb trail starts at Dell’s headquarters, where CEO Michael Dell has been selling off assets to strengthen the company’s balance sheet before Dell finalizes its $67 billion buyout of EMC Corp. An EMC shareholder vote on that deal is set for July.

The next break crumb leads to Francisco Partners and Elliott Management Corp., which are negotiating to buy SonicWall and/or Quest Soft from Dell, Reuters reported early today.

Francisco Partners: Combining WatchGuard, SonicWall?

Take a closer look at Francisco Partners and you’ll notice that the private equity firm owns WatchGuard, notes Ted Hulsy, a SonicWall veteran and industry observer.

Ahem… Is a bigger firewall business merger looming? Hmmm…

WatchGuard’s product lineup includes next-generation firewall appliances, intrusion prevision services, unified threat management solutions and more. SonicWall’s offerings span network security firewalls, email security and more. However, I don’t know how much product overlap WatchGuard and SonicWall would have if Francisco Partners acquired SonicWall and combined the two businesses.

Like we said: This blog falls firmly into the category of speculation. Dell isn’t commenting on the potential SonicWall sale, and Reuters says there’s a chance any deal involving SonicWall and/or Quest Software could fall apart.

But Then Again…

The other wildcard: ChannelE2E doesn’t know if Francisco Partners and Elliott Management are bidding together for SonicWall and Quest Software, or if the offers involve separate bids for different pieces of Dell’s software business.

Oh, and one more thing: Private equity firms sometimes own two businesses in similar markets but keep them separate. In other words, ChannelE2E’s alleged breadcrumbs leading from Dell SonicWall to Francisco Partners to WatchGuard could be an hallucination on our part…

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