After its plans to buyout EMC Corp. became officially known in late 2015, Dell Inc. had been drumming up funds to cover the debt it is taking on from making such a hugh cash-and-stock acquisition. The latest move sees the PC manufacturer selling off its IT consulting division to NTT Data Corp.
The sale, with Dell and NTT Data sealing the deal at a cool US$3 billion, will achieve very specific objectives for both parties. With the former, it will trim off some of the US$43 billion debt that it picked up through the EMC purchase while the latter is able to expand its foothold in the US and extend its reach into specific focus areas like healthcare, insurance, and financial services.
As is, the purchase value excludes all debts that had been generated while Dell managed this division and any unspecified advisory fees.
Dell originally created its IT Services unit when it previously purchased Perot Systems in 2009 for US$3.9 billion. All in all, its sale price to NTT Data did not generate any massive losses.
While Dell sees this sales as a means to reduce debt and streamline its operations with the pending integration of EMC into its organisation, the move is not a complete solvency process of the division. Prior to the sale, Dell has divested some of the section’s operations and integrated parts that has been deemed as necessary for the overall streamlining process. These selected aspects have not been included in the sale.
Once NTT officially takes over and merges the Dell division it acquired with its own US-based IT consulting operations, it will immediately reach out to the current of clients that Dell previously serviced and seek out new ones as part of its efforts to bolster its expansion efforts.
Beyond selling off its IT Services unit, Dell is also in talks with private equity firms on selling another two properties – Quest Software and SonicWall – to further finance the EMC purchase. Both are closely linked to the Dell IT Services division as they, respectively, deal with IT management and data security.