Update 9:40 a.m. PDT: Added details of the movement of shares for Dell and for Perot Systems.
Dell announced Monday that it will buy IT services provider Perot Systems for $3.9 billion.
The two companies expect to provide a broad range of IT services and packages, expanding the global reach of Perot Systems and selling Dell computer systems to additional Perot customers. The move could be a shot in the arm for Dell, giving it a way to diversify beyond its bread-and-butter business of selling hardware.
"This significantly expands Dell's enterprise-solutions capabilities and makes Perot Systems' strengths available to even more customers around the world," said Dell CEO Michael Dell. "There will be efficiencies from combining the companies, but the acquisition makes such great sense because of the obvious ways our businesses complement each other."
Perot Systems, founded by one-time presidential candidate Ross Perot, provides IT services and business solutions to customers in health care, government, manufacturing, banking, and insurance. The company has built a large customer base in North America, Europe, the Middle East and Africa, and Asia.
"Today's announcement is the next step in formalizing a relationship that has flourished for some time," said Perot Chairman Ross Perot Jr. "When my father founded Perot Systems he envisioned a global information-technology leader. The new, larger Dell builds on that promise and its own successes by taking Perot Systems' expertise to more customers than ever."
Under the agreement, PC and server maker Dell will acquire all outstanding common stock of Perot Systems for $30 a share in cash, a 65 percent premium over Friday's closing price. Subject to the usual government approvals, the deal is expected to close in Dell's November-January fiscal quarter.
In Monday morning trading, Perot Systems' shares were up by essentially that same margin, to $29.60. Dell's shares were down about 4 percent to $15.92.
Once the deal is completed, Perot Systems will become Dell's services unit, headed by Peter Altabef, current Perot Systems CEO. Ross Perot Jr. is expected to be considered for a slot on Dell's board of directors.
Dell and Perot Systems have worked together in the past. In April, for instance, they teamed up to get in on the ground floor of electronic health records, a field that is expected to grow substantially in coming years as hospitals and physicians increasingly digitize patients' medical records. The companies also talked about the ability to run some medical applications in a hosted, "private cloud" offering to help make costs more manageable.
One of the largest computer makers in the world, Dell has been hit hard by the global recession as its business customers hold off on upgrading their banks of servers and arrays of desktop and laptop PCs. In its most recent quarter, Dell's earnings were down 23 percent year over year to $472 million, on revenue of $12.76 billion, also down just over 20 percent.
Dell and Perot Systems say that over the past four quarters they have taken in a combined $16 billion in enterprise hardware and IT services revenue, with about $8 billion from enhanced services and support.