Dell To Buy Compellent For $884 Million
ROUND ROCK (AP) – Dell Inc. said Monday it has a deal to buy the data storage company Compellent Technologies Inc. for $884 million.
The offer price is slightly more than Dell said it would pay last week, before the companies had signed a formal agreement. Dell says it will pay $27.75 per share, up from $27.50.
That’s still a 3 percent discount to Compellent’s closing price of $28.71 on Friday. Compellent shares slipped 76 cents, or 3 percent, to $27.95 ahead of regular trading Monday. Dell shares were down 11 cents at $13.78.
Investors have bid up the company’s stock in recent months, with a string of acquisitions in the storage industry heightening anticipation of takeovers. The company’s share price closed at $11.86 on Aug. 13, the last trading day before Dell launched its unsuccessful bid for Compellent rival 3Par Inc. After a bidding war, Hewlett-Packard Co. walked away with 3Par for $2.35 billion.
Dell, based in Round Rock, is trying to catch up with other tech firms that have expanded more quickly into the business of storing and organizing data for companies and governments.
Providing that sort of back-office technology is shaping up as a more profitable line of business than selling personal computers, which is how Dell still generates most of its revenue.
The company said Monday that it will incorporate Compellent into an expanding group of acquired storage businesses, including PowerVault and EqualLogic.
Dell said it plans to maintain and invest in Compellent’s existing operations in Eden Prairie, Minn., where the company is headquartered.
(© Copyright 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)