Dell ‘Close’ To £1.4bn Software Division Selloff
Pre-EMC garage sell lines up software assets for $2 billion sale to Francisco Partners and Elliot Management Corp
Dell is close to selling off its software business to acquisition firm Francisco Partners and the private equity arm of Elliot Management Corp for more than $2 billion (£1.36bn), according to sources speaking to Reuters.
The three sources said that Dell wants to sell nearly all of its software assets, which include SonicWall and Quest Software, and that the potential acquirers are in advanced talks with Dell. Dell bought Quest Software in 2012 for $2.4 billion (£1.6bn).
A deal could be reached as early as next week, said the sources, but that Dell would retain Boomi, its cloud software asset.
Dell software sale
The potential sale comes as Dell looks to offload its most unprofitable assets in preparation for the $67 billion (£46bn) acquisition of EMC.
In March, NTT bought Dell’s consulting business Perot Systems for $3 billion (£2bn).
In last week’s quarterly results, Dell’s parent company Denali Holdings reported a decline in revenue and a 2.4 percent fall in sales for Dell, with the company’s software division reporting flat revenue at $332 million (£236m).
Dell’s enterprise hardware business suffered a two percent revenue decline, down to $3.6 billion (£2.5bn). Income from operations fell 20 percent to $192 million (£135m), which Denali pinned on the hiring of new sales staff.
Denali attributed some losses to the $63 million (£44m) cash acquisition of EMC. Denali’s Clinet Solutions group, which includes Dell’s PC sales managed to make $8.6 billion (£6bn) in sales for the quarter. However, this is still down three percent from the same period last year
