Enterprise, Mergers and Acquisitions, Mergers and Acquisitions

NTT Board Discussing Dell Perot Takeover Bid

NTT's board of directors this week plans to discuss the company's proposed takeover of Dell Inc.'s Perot Systems business, according to Japan Times.

Rumors about NTT Data acquiring Dell's IT services business -- which pundits still call Perot Systems -- have circulated for several weeks. In fact, an NTT executive allegedly was set to hand-deliver a $3.5 billion bid to Michael Dell the week of March 7.

Dell has been looking to sell off some assets and boost its balance sheet ahead of the company's proposed $67 billion buyout of EMC Corp. That deal is expected to close between May and October 2016, both Dell and EMC have indicated. However, Dell also needs to line up financing for the buyout -- though company officials says that process is moving along as expected.

Multiple companies have expressed interest in Dell's IT services business since December 2015. Aside from NTT, other potential suitors allegedly included Atos (a French IT services firm) and Cognizant Technology Solutions. But Atos denied interest in Perot in February, and Cognizant delivered a weaker-than-expected forecast for fiscal 2016 — which suggests a potential bid for Dell’s IT services business is unlikely.

At present, most folks tracking the negotiations suggest NTT is the exclusive bidder. An offer of about $3.6 billion is expected, Japan Times reported. Dell’s services segment, which includes Perot, had sales of $2.8 billion in the fiscal year ended Jan. 29, down about five percent from 2015, according to a regulatory filing, the paper added.

To further strengthen its financial footing, Dell plans to IPO SecureWorks — the company’s managed security services platform — sometime in 2016. There have also been rumors about Dell potentially selling off pieces of its software business— including the Quest Software assets. But those rumors have gone quiet the past couple of months.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.