Dell makes a $1.4 virtualization bet:
Dell Buying EqualLogic for $1.4 Billion
Monday November 5, 8:59 am ET
Dell Acquiring Virtualization Provider EqualLogic in $1.4 Billion Cash Deal
ROUND ROCK, Texas (AP) -- Computer maker Dell Inc. said Monday it agreed to buy data storage systems provider EqualLogic Inc. for $1.4 billion in cash to strengthen its position in the growing virtualization market.
EqualLogic's virtualization products allow a single computer to function like multiple machines, so companies can spend less on hardware and energy costs in data centers.
Research firm IDC estimates spending on virtualization software and supporting services will reach to more than $15 billion worldwide in 2011, up from $6.5 billion last year.
Dell expects the deal to reduce earnings, excluding the amortization of intangibles, by 2 cents to 5 cents per share for fiscal 2009 and 2010.
Software virtualization company VMware Inc. went public in August in the largest tech IPO since Google's three years earlier. EqualLogic filed for an IPO in August but did not set a date.
The deal is expected to close in Dell's fiscal fourth quarter, which ends in January, or early in the first quarter.
EqualLogic, based in Nashua, N.H., has over 3,200 customers in 30 countries.
Dell shares fell 55 cents to $29.50 in premarket trading after closing at $30.05 on Friday.
biz.yahoo.com |
