Dell to buy Compellent for USD 884 million
Dell Inc said on Monday that it has a deal to buy the data storage company Compellent Technologies Inc for USD 884 million.india Updated: Dec 13, 2010 21:52 IST
Dell Inc said on Monday that it has a deal to buy the data storage company Compellent Technologies Inc for USD 884 million.
The offer price is slightly more than Dell said it would pay last week, before the companies had signed a formal agreement. Dell says it will pay USD 27.75 per share, up from USD 27.50.
That's still a 3% discount to Compellent's closing price of USD 28.71 on Friday. Compellent shares slipped 76 cents, or 3%, to USD 27.95 ahead of regular trading on Monday. Dell shares were down 11 cents at USD 13.78.
Investors have bid up the company's stock in recent months, with a string of acquisitions in the storage industry heightening anticipation of takeovers. The company's share price closed at USD 11.86 on August 13, the last trading day before Dell launched its unsuccessful bid for Compellent rival 3Par Inc After a bidding war, Hewlett-Packard Co walked away with 3Par for USD 2.35 billion.
Dell, based in Round Rock, Texas, is trying to catch up with other tech firms that have expanded more quickly into the business of storing and organising data for companies and governments.
Providing that sort of back-office technology is shaping up as a more profitable line of business than selling personal computers, which is how Dell still generates most of its revenue.
The company said on Monday that it will incorporate Compellent into an expanding group of acquired storage businesses, including PowerVault and EqualLogic.
Dell said that it plans to maintain and invest in Compellent's existing operations in Eden Prairie, Minnesota, where the company is headquartered.