Dell buys Perot Systems in $3.9bn deal

• $3.9bn agreed takeover will broaden company's services arm
• Move follows Hewlett-Packard's rival deal with Electronic Data Systems

The US computer company Dell is splashing out $3.9bn on Perot Systems, the information technology company founded by the two-time US presidential candidate Ross Perot.

The agreed takeover, the biggest Dell has made, is intended to broaden the hardware manufacturer's services arm, enabling it to provide all-round packages and consultancy to big business clients. It echoes a recent deal in which rival Hewlett-Packard bought Electronic Data Systems.

Based in Texas, Perot Systems was established in 1988 by Perot, then a navy veteran and former IBM salesman, along with eight associates. Among the first computer services companies of its kind, the firm's growth made Perot a billionaire, helping him to bankroll independent pushes for the White House in 1992 and 1996.

The firm, which employs 23,000 people, generated sales of $2.8bn last year. Perot, 79, remains chairman emeritus of Perot Systems and his son, Ross Perot Jr, is chief executive.

The younger Perot described the buyout by Dell as a "great opportunity" for the business. "When my father founded Perot Systems he envisioned a global information technology leader. The new, larger Dell builds on that promise and its own successes by taking Perot Systems' expertise to more customers than ever," he said.

For Dell, the purchase of a services business will provide capability for a broader range of offerings to customers. It could help the company compete with the likes of Hewlett-Packard and IBM, both of which have proven more resilient in financial terms during the global economic downturn.

Dell's founder, Michael Dell, said: "We consider Perot Systems to be a premium asset with great people that enhances our opportunities for immediate and long-term growth."

The cash deal is for $30 a share, a hefty premium of 69% on Perot's closing price on Friday. Perot's shares leapt $11.71 to $29.62 during the first hour of trading on Wall Street yesterday.

There were immediate questions over the price Dell was willing to pay. Shannon Cross, an analyst at Cross Research, said the transaction was "expensive" in comparison with Hewlett-Packard's purchase of EDS. "As opposed to HP/EDS, Dell does not appear to expect significant cost synergies, but rather expects to benefit from cross sales," he said.

Dell said that Ross Perot Jr would be considered for appointment to its board of directors.

The elder Perot, who won 19% of the vote in a three-way battle for the White House with Bill Clinton and George Bush in 1992, remains active in public life. He operates a website,, which campaigns against America's rising budget deficit.


Andrew Clark, New York

The GuardianTramp

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