NTT Data Corp., a global provider of technology-enabled services and solutions has agreed to buy Dell’s Perot Systems Unit for $3.05 billion in an effort to expand its market presence in healthcare IT, insurance and financial services consulting. Formerly known as Perot Systems, Dell’s IT services division is a major provider of technology consulting to hospitals and government departments. Founded in 1988 by former U.S. presidential candidate Ross Perot, it was acquired by Dell in 2009 for $3.9 billion.
“There are few acquisition targets in our market that provide this type of unique opportunity to increase our competitiveness and the depth of our market offerings,” said Mr. McCain. “Dell Services is a very well-run business and we believe its employee base, long-standing client relationships, and the mix of long term and project-based work will enhance our portfolio. We are confident this transaction will be positive for clients, employees, and shareholders, and will advance our collective vision to be an innovative partner for our clients.”
Dell Services will continue to operate under the leadership of Suresh Vaswani, president of Dell Services, reporting to Michael Dell, until the transaction closes. The acquisition is subject to customary closing conditions and regulatory approvals.
Acquisition Marks NTT’s Significant Expansion into Health IT
The combined company will become an IT and BPO solutions powerhouse for the healthcare IT industry and is expected to add about 28,000 employees in North America and India. The acquisition marks NTT Data’s largest deal to date as it looks to strengthen and expand its global delivery network, and bolster its infrastructure services capabilities.
NTT previously acquired South African IT company Dimension Data Holdings PLC for $3.2 billion and U.S. IT-services firm Keane Inc. for an estimated $1.4 billion in 2010. The Tokyo-based IT company provides services/solutions include EMRs, surgery management, billing, insurance claims and is currently used at hundreds of providers throughout North America.
Unloading Assets to Pay for EMC Acquisition
The Perot Systems Unit acquisition is expected to be the first of several assets to be sold to help pay down its hefty $49.5B debt for the recent $67B acquisition of data storage company EMC in October 2015. Dell stated last fall that it plans to sell around $10 billion in non-core assets, including software and services to reduce its debt load from the EMC merger.
Other potential assets that could be sold include Quest Software, which was acquired by Dell in 2012 for $2.4 billion. The EMC merger is expected to close between May and October 2016. Dell stated that the combined company will focus on reducing its debt during the first 18 to 24 months after the completed merger to achieve an investment-grade credit rating.
Dell’s annual revenue reached $58.1 billion in the 12 months ending January 2015.
