ROUND ROCK, Texas – Dell Inc. said Monday it has a deal to buy the
data storage company Compellent Technologies Inc. for $884 million.
The offer price is slightly more than Dell said it
would pay last week, before the companies had signed a formal agreement.
Dell will pay $27.75 per share, up from $27.50.
Compellent shares dropped 73 cents, or 2.5 percent,
to close at $27.98 Monday. Dell shares fell 54 cents, or 3.9 percent, to
close at $13.35.
The final offer price is still a 3 percent discount
to Compellent's closing price of $28.71 on Friday. Investors had bid up
Compellent's stock to as high as $34.16 in recent months, with a string
of acquisitions in the storage industry heightening anticipation of
takeovers. The stock closed at $11.86 on Aug. 13, the last trading day
before Dell launched an unsuccessful bid for Compellent rival 3Par Inc.
After a bidding war, Hewlett-Packard Co. walked away with 3Par for $2.35
Dell, based in Round Rock, Texas, is trying to catch
up with other tech companies that have expanded more quickly into the
business of storing and organizing data for companies and governments.
Dell has an agreement to sell products from EMC Corp., a major player in
the data storage industry.
During a conference call discussing the Compellent
deal, Dell executives said they will continue to sell EMC storage and
support its existing EMC customers.
Providing data-center technology is shaping up as a
more profitable line of business than selling personal computers, which
is how Dell still generates the majority of its revenue.
The PC maker said both companies' boards have
approved the deal. Dell said plans to incorporate Compellent into an
expanding group of acquired storage businesses, including PowerVault and
EqualLogic. Dell will also start selling Compellent storage products
Dell said it has retention agreements with
Compellent's senior leadership and that it plans to maintain and invest
in Compellent's existing operations in Eden Prairie, Minn., where the
company is headquartered. Compellent employs about 490 people, and the
companies said Monday that all of those employees will keep their jobs.
The deal is expected to close in the first quarter of next year.