Dell, is going to buy Ross Perot founded, Perot systems in an all cash deal of $3.9 billion. Perot systems is an IT consulting business, founded in 1988. Dell is trying to match its competitors like Hp or IBM by expanding its IT consulting business, and what could be better than Perot systems to expand in this field. Since both, dell IT business and Perot systems are Texas based, so it will be easy to combine both and it will be run by Peter Altabef, the current CEO of Perot systems.
Perot Systems is not a great money machine, last year it only managed $2.5 billion in annual profits, compared to $61 billion of Dell. However, dell has the much-needed framework that can easily pump up the profits of Perot systems. The shareholders of Perot systems will get $30 per share.
Dell was already looking for an asset like this to make a good investment. This pair complements each other in a good way because dell is famous for its personal computers while Perot systems specialize in IT support for hospitals and government offices. Apparently dell’s second quarter profits fell by 23% due to the global recession, hopefully for dell this acquisition will help things improve.