The rumors are back. In addition to preparing SecureWorks for an IPO, Dell is negotiating with private equity firms to potentially sell SonicWall, Quest Software and/or Perot Systems, according to Reuters. The potential sum for all three businesses -- $11 billion or so -- could help Dell to strengthen its balance sheet ahead of the EMC-VMware buyout, which faces some challenges ahead of an expected 2016 close.
The potential sales would be organized into two packages, according to Reuters:
- Quest Software (IT management) and SonicWall (security) each are worth about $2 billion. Potential bidders apparently include KKR, Thoma Bravo LLC and Vista Equity Partners Management. Goldman Sachs is advising on that potential deal, Reuters said.
- Perot Systems (essentially Dell's IT services arm) could fetch $5 billion to $6 billion). Citigroup is advising on that potential deal, Reuters added.
Fresh reports also confirm that Dell plans to IPO its SecureWorks business. Earlier reports also suggested that Dell's AppAssure business may also be for sale. AppAssure specializes in data backup and protection.
Dell Software: Reorganized for Breakup Sale?
Dell Software recently reorganized into four areas: Systems and Information Management (SIM); Security Solutions; Boomi; and Statsoft. In theory, that simplified grouping could mean the SIM business (containing Quest Software) and the Security Solutions business (SonicWall) could be up for sale. Boomi (cloud integration) and Statsoft (embedded analytics) apparently are not for sale.
Still, it's difficult to say if Dell is really preparing to sell one or more of its four software divisions in their entirety. On the Security Solutions front, for instance, Dell now offers numerous security and SaaS services outside of the SonicWall family.
In an interview with ChannelE2E yesterday, Dell North America Channel VP Frank Vitagliano said SonicWall remains very popular, continues to perform strongly, and has attracted a fiercely loyal partner base. ChannelE2E did not ask about any potential asset sales.
Dell: Selling and Buying?
Dell faces an intense few months as the company strives to finalize the $67 billion buyout of EMC and VMware. Some EMC and VMware shareholders have been pushing for a better terms on the buyout offer. And EMC apparently has overhauled its financial plans for Virtustream, an emerging cloud company.
The potential sale of SonicWall, Quest Software and/or Perot Systems could help to strengthen the company's balance sheet along the way.