Dell Inc. Close to Selling Perot Systems to Fund EMC Corporation Deal

Nippon Telegraph and Telephone (NTT) has emerged as potential buyer for Perot Systems

Dell Inc. (NASDAQ:DELL) has been looking to sell its non-core business units in a bid to fund the $67 billion EMC Corporation (NYSE:EMC) acquisition deal. Perot Systems, the information technology consulting division arm of Dell, has also been on the list, and a number of companies seem interested.

Wall Street Journal reports that Japan’s Nippon Telegraph and Telephone (NTT) is the latest company involved in negotiations to bring Perot Systems under its umbrella. The report says the deal could involve NTT paying billions of dollars to purchase Perot through its subsidiary, NTT Data.

NTT, the largest telecommunications company in Japan, has been facing a decline in domestic growth, that has caused it to explore expansion opportunities abroad. Perot generates $3 billion in revenue per year, and could push NTT Group’s aims to increase international revenue to $22 billion by the fiscal year, ending in March 2018, from $15 billion last fiscal year.Sources say the deal has not been finalized, since the final price is yet to be agreed upon. Dell prices this unit at $5 billion, but interested parties in the past did not agree. Nikkei Asian Review reports that NTT plans to offer more than $3.52 billion to buy the IT services unit.

To get a clearer picture, we contacted representatives of Dell and NTT Data, and are waiting to hear from them.

Founded by Ross Perot in 1988, Perot was acquired by Dell in 2009, for $3.9 billion. It provides information technology consultation services in the healthcare, manufacturing, banking, and insurance industries. Perot has gained recognition in the healthcare industry, where it innovated for services like digitizing and automating medical records.

Dell has been working on ways to reduce the amount of debt it draws as it approaches the EMC buyout, which is going to be the largest acquisition in the technology industry. It plans to finance the acquisition with cash and shares. The company, owned by Michael Dell and Silver Lake Partners, could end up with almost $50 billion in debt from the purchase.

These rumors must be taken with a grain of salt, because these reports have made headlines previously. In January, rumors suggested French IT services company Atos was in talks to purchase Perot for $4.2 to 4.3 billion. Atos declined the suggestions.

Current negotiations with NTT Data may also be an overplayed regular interaction involving Perot.

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