Dell Closes Twin Acquisitions - Analyst Blog
30 5월 2012 - 1:00AM
Zacks
After a disappointing first quarter, the world’s third largest
PC maker by shipment, Dell Inc. (DELL) recently
confirmed the completion of two of its most sought-after
acquisitions. The acquisitions of two cloud-software providers –
Make Technologies and Wyse Technologies – were announced in April.
Both deals, the financials of which were kept confidential, were
crucial for building Dell’s position in the software vertical.
California-based Wyse Technology is a provider of thin client
(usually a device or a program that allows a number of users to
perform computational functions based on a single server) hardware
and software, desktop virtualization software and cloud software
for all computing devices. Wyse has business ties with tech giants
such as Cisco Systems Inc. (CSCO), Citrix
Inc. (CTXS), IBM Corp. (IBM),
Microsoft Corp. (MSFT) and VMware
Inc. (VMW).
Make Technologies provides software and services that modernize
traditional applications used by cloud-based systems. The
cloud-based products from the company have the capacity to cut
cost, reduce risk and re-engineer applications.
Wyse Technology will not only enrich Dell’s desktop
virtualization capabilities, but will also expand its enterprise
solutions portfolio, as a whole. On the other hand, inputs from
Make Technologies will open up growth opportunities for Dell’s core
application portfolio management software and services. With all
these new capabilities in its pocket, Dell will go all out to sell
its new offerings to the existing customers first.
We don’t have much information about the financial impact of
these two acquisitions, but the impending long-term growth
opportunities arising from the deals can easily be gauged. The new
units will enhance Dell’s enterprise solutions portfolio, which
would generate higher revenue, going forward. We also think that
the positive impact of all the acquisitions may not be evident for
some time, as the new units would take time to gel with the
existing capabilities.
Apart from these two acquisitions, Dell also acquired Clerity
Solutions and SonicWall in March and AppAssure in February, to
boost its enterprise solutions portfolio.
Also, the takeover of IT management software provider,
Quest Software Inc. (QSFT) is in the wind. While
there were no comments from Dell’s side, market sources say that
Quest has already been offered a price of $23 a share from private
equity firm Insight Venture Partners in March. If Dell has to bid,
it will have to pay a higher price.
Dell’s acquisition spree is encouraging but there are
integration risks. Also, Dell may have to raise new debts for
funding the acquisitions, which may increase the interest
burden.
Currently, Dell has a short-term Hold recommendation, as
indicated by the Zacks #3 Rank.
CISCO SYSTEMS (CSCO): Free Stock Analysis Report
CITRIX SYS INC (CTXS): Free Stock Analysis Report
DELL INC (DELL): Free Stock Analysis Report
INTL BUS MACH (IBM): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
QUEST SOFTWARE (QSFT): Free Stock Analysis Report
VMWARE INC-A (VMW): Free Stock Analysis Report
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