Firms Reportedly Are Bidding for Dell's Quest, SonicWall Units
Selling the software, security and services businesses would help Dell reduce the debt it will take on when it buys EMC for $67 billion.Dell reportedly is fielding bids from several firms for its Quest and SonicWall businesses and is shopping its services unit as the tech vendor looks to reduce the debt it will take on when it buys storage giant EMC for $67 billion. Citing unnamed sources, Reuters is reporting that three buyout firms—KKR & Co., Thoma Bravo and Vista Equity Partners Management—are all bidding to buy the Quest and SonicWall businesses, which combined are valued at about $4 billion. Quest has helped shape Dell's IT management software portfolio since it was bought for $2.4 billion in 2012. Dell bought SonicWall for its network security technology in 2012. At the same time, Dell is working with Citigroup to sell its IT services business, according to Reuters. The services business is based on the company's $3.9 billion acquisition in 2009 of Perot Systems in a move designed to enable Dell to better compete with the likes of Hewlett-Packard and IBM. The services unit is valued at $5 billion to $6 billion, and Dell is looking to sell it to large services companies in the United States and other countries, according to the sources. Reports of Dell's interest in selling some of its assets first emerged in early November, about a month after CEO Michael Dell announced that his company planned to buy EMC and its various businesses—including VMware, RSA, VCE and Pivotal—for $67 billion, the largest deal in the history of the tech industry. Dell officials have said that the company will take on as much as $49.5 billion in debt to buy EMC, and the sale of the businesses would help reduce the debt. They also said they will spend the first two years after the acquisition focused on reducing the debt.
The deal, which is expected to close in October 2016, was announced two years after Michael Dell—with Silver Lake Partners—successfully bought his namesake company for almost $25 billion and took it private.