Sources say Dell preparing $10bn asset sell-off, with the likes of Quest Software, AppAssure, and Sonic Wall all up for grabs
Dell is readying itself to sell up to $10 billion worth of assets to offload some of the debt it accumulated from its $67 billion (£44bn) EMC acquisition, according to sources.
The sources told Reuters that the company has alerted credit rating agencies this week to the plan.
The people familiar with the matter said that some of the booted assets could include IT management brand Quest Software, AppAssure, email encryption provider SonicWall, and Perot Systems.
The October acquisition of EMC, the largest in the history of the tech industry, is part of Dell’s efforts to diminish its reliance on the stagnant PC business, as it moves to become a complete provider of enterprise computing services. As part of these efforts Dell took itself private in a 2013 deal worth $25bn (£16bn).
CEO Michael Dell’s decision for his private company to make acquisition comes at a time when rivals seem to be favouring separation to deal with the great technological shift happening in the enterprise – take HP and eBay for instance.
But by being private, Dell doesn’t have to worry about the eagle eyes of investors and quarterly results to appease customers.
“I think the combined company is well positioned to address the move to the cloud,” said Dell in a media conference call in October.
“Remember that Dell has been providing infrastructure to public cloud, private cloud, and hybrid cloud for a long time, and has done quite well there.”
Dell and EMC are both old timers in today’s fast, startup market. The acquisition should even be seen as a banding together, a reformation of the guard preparing to take on the new world of cloud computing, where companies like Amazon Web Services (AWS) hold the higher ground.