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Dell Sells Services Division To NTT Data

By - Source: Toms IT Pro
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Dell's pending $67 billion EMC merger has the company selling off several of its non-core assets to fund the effort, and Dell Services is the first to go. Japan's NTT Data Corporation announced it purchased the division for $3.05 billion.

Dell originally purchased the division from Perot Systems, which former U.S. presidential candidate Ross Perot founded, for $3.9 billion in 2009. The division is responsible for providing IT and digital business solutions in healthcare, financial services, insurance and the public sector. Dell lost roughly $850 million in comparison to what it paid for the unit in 2009.

Dell intends to leverage a series of loans, asset divestitures and VMware tracking stock to fund its EMC acquisition. Dell is assuming $43 billion in debt, and there is speculation that other assets, such as the Quest Software division, are also on the chopping block.

NTT Data, which has 230 data centers worldwide, has a rich history as an IT services provider in infrastructure services, cloud services, application services and business process outsourcing. NTT Data has over 80,000 employees and generates more than $100 billion in annual revenue. The Dell Services division bolsters NTT Data's strategic goals by immediately expanding its presence in North America.

"I'm extremely proud of Dell Services' solid growth, broad capabilities and deep domain expertise in Healthcare & Life Sciences, Banking, Financial Services and Insurance. Our investments in digital services, application modernization, tools, automation and 'as-a-service' models, have enabled Dell Services customers to simplify their IT environment, empower their workforce, engage their customers and grow," said Michael Dell, chairman and chief executive officer of Dell Inc. "Together, NTT DATA and Dell Services will be a winning combination for Dell Services customers, team members and partners."

The current president of Dell Services, Suresh Vaswani, will remain in control of the division until the transaction completes. The acquisition is subject to the normal regulatory approval process, but there is no major opposition expected. Dell and NTT Data did not provide a timeline for transaction completion, or indicate the impact on the existing employees.

Dell is also well underway securing the first tranche of loans, rumored at $10 billion, for its EMC acquisition. We expect more news on Dell's progress later in the week, and the pending EMC shareholder vote looms on the horizon in May.