Dell may be in talks to sell up to US$10 billion or more in assets as a way to help ease its pending acquisition of storage and cloud giant EMC.
Reuters last week reported that Round Rock, Texas-based Dell is talking to three equity buyout firms, including KKR & Co, Thoma Bravo, and Vista Equity Partners Management, about the possibility of purchasing Dell's Quest Software business and its SonicWall security division for about US$2 billion each.
Dell is also in working with Citigroup as part of a move to sell its Perot Systems IT services business, estimated to be worth between US$5 billion and US$6 billion, to one of several large US-based and foreign services companies, Reuters reported.
Reuters early last month first reported the possibility that Dell might be looking to sell about $10 billion in assets.
Dell spokespeople were unable to respond to a request for more information by publication time.
Those deals, if consummated, would go a long way toward helping Dell pay for its planned US$67 billion acquisition of EMC. Dell is expected to take on about US$49.5 billion in debt as part of the acquisition, with the rest from cash and outside investments.
The sales of Quest and SonicWall in particular would also simplify the acquisition given the large degree of overlap between Dell and EMC in their current software and security businesses. For example, when it comes to data protection software, EMC's Avamar, NetWorker and SourceOne Archiving applications and Mozy cloud storage offerings compete to varying degrees against Dell's AppAssure, NetVault Backup and vRanger offerings.
In 2012, Dell acquired AppAssure, then a standalone provider of data protection software. Later that same year, Dell followed up with its acquisition of Quest Software, giving the company a full portfolio of storage, security and management software platforms, including NetVault Backup and vRanger.
Dell later combined them into the Dell Software Group, and in November reorganised that group to reallocate resources.
Meanwhile, on the security side, Dell has a wide range of security software buttressed by its March 2012 acquisition of SonicWall. Dell is pushing SonicWall higher into the enterprise, releasing earlier this year the first major upgrade to its SonicWall TZ series firewall in nearly six years.
EMC's RSA is one of the best-known security brands in the industry, and is also the name of the security industry's best-known security conference. RSA earlier this year released a new family of Via smart identity solutions that run from the endpoint to the cloud.
In 2009, Dell acquired Perot Systems for about US$3.9 billion as a way to move into the enterprise services business.