martinwolf
Transaction Analysis
NTT Data Acquires Dell's Perot Systems
Financial Information
- Enterprise Value $3.05 billion
- EV/Revenue* 1.0x
Transaction Facts
- Japanese technology company NTT Data announced today that it was acquiring Dell subsidiary Perot Systems for approximately $3.05 billion, finally making official a transaction that had long been rumored and significantly increasing NTT Data's presence in North America.
- Founded by billionaire and once presidential candidate Ross Perot, Perot Systems was acquired by Dell in Sept. 2009 for $3.9 billion and provides IT consulting services, particularly in the healthcare, manufacturing, banking and insurance industries.
- The transaction provides Dell with much-needed cash, reducing its overall debt load as it shores up resources to complete its record acquisition of EMC, announced late last year.
- While no closing date was included in the announcement, NTT Data is expected to acquire all 28,000 employees of Perot Systems.
In Uncertain Times, Focusing Through M&A
- NTT's Latest Acquisition: NTT Data, the IT services and consulting arm of Nippon Telegraph & Telephone Corp. (NTT Group), has been very active in international M&A as it confronts declining domestic growth. Though this acquisition would be its largest by far, the company acquired US IT services firm Keane for $1.4 billion in 2010 and since 2011 has spent the equivalent of $547 million on acquisitions outside Japan. NTT Group famously acquired Dimension Data for $3.2 billion in 2010 and recently announced that it plans to grow overall overseas revenues to $22 billion by the end of 2017.
 Last One Standing: NTT Data is the last remaining name out of a veritable "Who's who" of major international IT companies reportedly approached by Dell as a potential buyer for Perot Systems. Other companies rumored to have been approached include IBM, Hewlett Packard Enterprise, Infosys, Tata Consulting Services, Genpact, CGI and Atos.- More Than Meets the Eye: Though Dell purchased Perot Systems in 2009 for approximately $800 million more than it is receiving in this sale, the asset being sold today is different than the one that was acquired. Dell has divested some operations and integrated others, which are not included in the sale.
- Priced to Move: While initial reports cited sources who claimed Dell was seeking a sale price of more than $5 billion, multiple stories throughout the process claimed that price became a sticking point and caused potential deals (such as those with TCS and Atos) to collapse. However, even at a lower number, this transaction accounts for a significant influx of capital in advance of Dell's $67 billion purchase of EMC-and the company has also reportedly been speaking to private equity firms about selling IT management subsidiary Quest Software and data security provider SonicWall.
For more information about this transaction,
click here to read the press release.
martinwolf was not the advisor in this transaction.
*While Perot Systems revenue is not disclosed, media reports cite Perot Systems as generating annual revenue of approximately $3 billion.
To receive instant analysis on the day's business news from the martinwolf team,
follow us on Twitter @martin_wolf_ and on LinkedIn at martinwolf.
|
| About martinwolf
With offices in the San Francisco Bay Area, martinwolf is a leading M&A Advisory focused on middle market companies in the IT Services, IT Supply Chain, IT-Enabled Business Process Outsourcing and Software as a Service (SaaS) space. Since 1997, our team has completed more than 140 transactions in nineteen countries and sold seven divisions of Fortune 500 companies. The firm is also a presenting sponsor of the Global IT M&A Forum. martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com. To learn more about martinwolf, contact Matthew Putzulu at [email protected]. © martinwolf 2016 |
|
|
"We're all working together; that's the secret."
Sam Walton
_________
|
|
|
