Dell Inc. has announced that it has reached a deal to purchase Perot Systems Corp. for $3.9 billion.  The acquisition is a good fit for Dell, as Perot is a provider of IT services and this will help Dell expand its technology services business.  This will also allow Dell to better compete against Hewlett-Packard and IBM in the IT services arena.  Dell has been looking for some time to acquire a company that has a strong focus on serving healthcare and federal government customers in order to diversify its range of offerings. Dell expects the acquisition to add to earnings in fiscal 2012, but some analysts have suggested the offer may have been too high.

The two companies expect to provide a broad range of IT services and hardware packages, expanding Perot Systems globally and expanding Dell’s existing customer base by selling computer systems to additional Perot customers. While the deal will close at upwards of $3.9 billion and Dell anticipates that the acquisition will increase its earnings in fiscal 2012, some analysts were rather surprised at the price tag; Dell agreed to pay $30 per share, which is a whopping 65 percent premium.  Dell’s shares were trading last Friday at closing time at $17.91 per share.

Dell is the Number 2 manufacturer of PCs, and earns nearly 60 percent of its revenue from the PC market. Currently, Dell’s services offerings comprise only about one-tenth of its sales. Perot Systems was founded by H. Ross Perot, a one-time Presidential candidate who ran as an independent candidate.  Perot Systems provides IT services and business solutions to its customers in the health care, government, manufacturing, banking, and insurance industries.  It has a large customer base in not only North America, but also in Asia, Europe, the Middle East and Africa.

"This significantly expands Dell's enterprise-solutions capabilities and makes Perot Systems' strengths available to even more customers around the world," said Dell’s 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 Chairman, Ross Perot, Jr., said of the acquisition, "Today's announcement is the next step in formalizing a relationship that has flourished for some time. 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."

Dell and Perot Systems have partnered previously in business deals. They joined together in April 2009 to gain a foothold in electronic health records specialization, a new field that is expected to have rapid growth in the future. The two companies have also discussed the possibility of running some medical applications in a hosted, "private cloud" offering to help make costs more manageable.

It is anticipated that the deal will close within Dell’s November-January fiscal quarter, subject to any delays of approval by the U.S. government.