Japan's NTT Data Corp (9613.T) said on Monday it has agreed to buy
Dell Inc's information technology consulting division for over $3 billion to
expand in North America and bolster its services business.
The
move will allow U.S. computer maker Dell to trim some of the $43 billion in
debt it is taking on to fund its pending cash-and-stock acquisition of data
storage provider EMC Corp (EMC.N),
a deal worth close to $60 billion.
The
Japanese company said it would pay around $3.05 billion, an amount that
excludes debt and unspecified advisory fees.
The
sale will also offer NTT Data, one of the world's largest technology services
companies, a bigger foothold in the United States, where it is looking to
expand in healthcare IT, insurance and financial services consulting.
Dell has also made progress in syndicating $10
billion of its financing package for the EMC acquisition dubbed 'term loan A',
people familiar with the situation said earlier. This is expected to be
increased in size by $500 million to $750 million due to strong demand, with
the extra money to be used to downsize some of the more expensive tranches of
the remaining $33 billion in financing, the people added.
The group of banks participating in the
term loan A has been expanded from the original eight underwriters to 25, with
more expected to join before the syndication is completed in the next week, the
people said.
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.
However, Dell has since divested some of
the unit's operations and integrated some others, which it is not including in
the sale. Some of the unit's capabilities were seen by Dell as redundant in the
wake of the acquisition of EMC.
Dell has also been speaking to private
equity firms about selling Quest Software, which helps with information
technology management, as well as SonicWall, an e-mail encryption and data
security provider, Reuters has previously reported. Together, Quest and
SonicWall could be worth up to $4 billion.
Dell's acquisition of EMC, which is backed
by founder and Chief Executive Michael Dell as well as private equity firm
Silver Lake Partners, is subject to approval by EMC shareholders. EMC is
expected to hold a shareholder vote on the Dell deal in May, allowing for the transaction
to be completed sometime between July and October.
Reuters had reported first on Feb. 12 that
NTT Data was in exclusive talks to buy Dell's IT services unit.
(Reporting by Greg Roumeliotis in New York; Editing
by Dan Grebler and Christopher Cushing)
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