Dell sells software unit ahead of EMC merger

In a quest to fund its planned MC-based EMC deal, Dell has confirmed that it is selling off its software division to private equity firms Francisco Partners and Elliott Management. The sale involves Quest Software’s Information technology management products and SonicWALL, an e-mail encryption and data security provider which Dell had bought for $1.2 billion and $2.4 billion in 2012 respectively. Boomi, however a smaller asset focusing on cloud-based software integration, will be retained by Dell. The terms of the deal aren’t public yet but purchase price is estimated to be around $2 billion, according to a Reuters report. Recouping only almost half, of what it spent ($2B out of $3.6) Dell is struggling to achieve its EMC acquisition of $67 billion which it agreed to acquire in October last year. Since, Dell has been divesting out assets. Earlier in March, It signed a deal with NTT Data, selling its Perot systems IT services for $3 billion (less than it paid for originally). And it has increasingly become difficult for the PC maker to keep both hardware and software under one roof with debts, this huge. The transaction was confirmed in a joint press release by Elliott Management, Francisco Partners and Dell. Tom Sweet, Senior Vice President and Chief Financial Officer, Dell, in the statement said:
“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.”
“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,” Sweet added. The acquisition will also sought advanced analytics, database management, data protection, endpoint systems management, identity and access management for the private equity pair. Microsoft platform management, network security, and performance monitoring code also included. Dipanjan Deb, Chief Executive Officer, Francisco Partners’ said, “Quest Software and SonicWALL provide mission-critical software to a large and loyal base of over 180,000 customers, and we see significant opportunity to build upon the company’s impressive technology and product portfolio. We are excited to be partnering with Elliott Management and want to thank Silver Lake Partners and Dell for their continued partnership.” Meanwhile the Dell software deal is Elliot Management’s first major private equity investment after the appointment of the former Golden Gate Capital executive, Isaac Kim to help with leveraged buyouts and acquisition of companies as an activist investor. “Elliott has been a long-term investor in the technology space and today’s announcement continues our progress,” said Jesse Cohn, Senior Portfolio Manager, Elliott Management. He also added that, “This acquisition represents a significant deal by Evergreen Coast Capital, Elliott’s recently established Menlo Park affiliate. We look forward to working with Francisco Partners to create significant value at these companies.”

Abhinav Mohapatra

An author who has a keen interest for the ‘off-beat’ <!--more-->An author who has a keen interest for the ‘off-beat’, he has covered and explored multiple facets of the marketing, advertising

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