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Dell to sell software branch to private equity consortium

Mon 20 Jun 2016

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Dell is set to sell its software business as it looks to place a heavier focus on the recent acquisition of storage vendor EMC Corp.

According to today’s press release, a consortium led by private equity group Francisco Partners and hedge fund Elliott Management has confirmed that it would be taking over Dell Software for an undisclosed sum.

The agreement between Dell and the consortium could be settled as soon as this week, although these negotiations could still end unsuccessfully.

‘Francisco Partners and Elliott Management’s deep passion for technology and proven track records in nurturing and building software businesses will enable Dell Software’s loyal base of employees to continue delivering innovation,’ commented Dell senior vice president and chief financial officer, Tom Sweet.

He added: ‘We look forward to continuing to work closely with the Francisco Partners and Elliott Management teams to further enhance the already great relationships Dell Software has with its customers and partners.’

The software unit offers businesses a range of services including analytics, database management, data protection, access control and performance monitoring. The deal also includes security firm SonicWall and software maker Quest Software, both of which were bought by the tech giant in 2012.

The U.S. computer maker is rethinking its strategy to help finance its recent purchase of EMC for $67 billion (approx. £45.6 billion). These moves have included flogging $20 billion in bonds and selling its information technology services branch to Japan’s NTT Data for $3.05 billion, originally pegged at $5 billion – a net loss of $800 million compared to the price Dell paid to acquire the business.

Dell’s tech security company SecureWorks also had an underwhelming IPO in April, only pulling together $112 million, 70%, of its expected $160 million.

Over recent years, Dell had decidedly expanded from its traditional hardware focus into the software arena. Now, the company is turning to storage and data centre technologies brought in from the EMC deal.


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