Japan's NTT Data To Buy Dell's IT Services Biz for $3.05 Billion
Dell is selling its IT services business to Japan-based NTT Data for $3.05 billion, the companies announced today. The deal is expected to expand NTT Data's global IT services portfolio while providing Dell with some of the funds it needs to pay for its acquisition of EMC Corp.
The deal for Dell's services division will provide customers of both companies with access to more business process outsourcing (BPO) capabilities, especially in the healthcare and insurance sectors, the company said. Customers will also benefit from expanded infrastructure and technology capabilities, according to Dell and NTT Data.
The transaction will be NTT Data's largest yet, according to reports. The privately owned Dell, meanwhile, will reap a part of the reported more than $60 billion it needs to borrow to help take EMC private and bring it into its fold.
Founded in 1988 by two-time presidential candidate and businessman Ross Perot, the IT services firm Perot Systems was acquired by Dell in 2009 and renamed Dell Services. The business provides enterprise customers with services including digital transformation, BPO, infrastructure management, IT security, support and IT consulting.
Last week, Dell Services announced a number of large new customer signings with values of over $100 million, including American Express Global Business Travel, Blue Cross & Blue Shield of Rhode Island, the Dubai Health Authority and Thermo Fisher Scientific.
"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," NTT Data CEO John McCain said today in a statement announcing the Dell Services deal. He added that the acquisition is expected to enhance NTT Data's portfolio through its mix of long-term and project-based work.
Paving the Way for EMC Deal
Subject to the usual closing conditions and regulatory approval requirements, the NTT Data/Dell Services deal is also expected to help Dell pave the way for its acquisition of EMC, which was announced in October. That deal, currently valued at more than $60 billion, requires Dell to compensate EMC shareholders for taking the company private.
The combination of Dell and EMC will create an "enterprise solutions powerhouse" able to provide business customers with a wide range of next-generation IT services such as hybrid cloud, digital transformation and software-defined data centers, Michael Dell, Dell's founder, chairman and CEO, said in the fall. That transaction is expected to close sometime between May and October.
Before NTT Data completes its acquisition, Dell Services will continue to be operated by business president Suresh Vaswani. "This acquisition will create even more value for customers and will benefit employees as they become part of a top ten global IT services business," he said in a statement.