By Connie Guglielmo
Oct. 13 (Bloomberg) — Dell Inc. founder Michael Dell, who announced a $3.9 billion takeover of Perot Systems Corp. last month, said his company is “rapidly developing” merger expertise and will seek more deals as part of a turnaround plan.
“You will see us be reasonably active,” Dell, the company’s chief executive officer, said in an interview yesterday. He said Dell will look at acquisitions that bolster sales to corporate customers and will consider more purchases in the health-care industry.
“We have a talented team of people that includes people who have been at Dell a long time and understand the Dell culture in the transactions that we’ve done and know why those have succeeded or not,” said Dell, 44. “We are rapidly developing that, and we’ve added some talent to help us do that.”
The acquisition of Perot Systems is the largest purchase in Dell’s 25-year history and follows the takeover of storage- computer maker EqualLogic Inc. for $1.4 billion in 2008. Dell, the world’s second-largest personal-computer maker, also hired International Business Machines Corp.’s top dealmaker, David Johnson, in May. Johnson, who didn’t work on the Perot deal, has a team working on “plenty of other things,” Dell said.
Perot Systems will expand Dell’s reach into the computer- services market, especially in the health-care industry, while lessening the company’s reliance on PCs. The combined company stands to benefit from a U.S. economic stimulus package that will pour about $20 billion into health-care information technology. Perot Systems gets about half of its sales from hospitals, physicians’ practices and health-insurance companies.
‘Promising for Growth’
“When you look at the health-care space, it’s the one sector of the economy that has the least amount of IT, and we see it as very promising for growth,” Dell said. “There’s usually more technology at the grocery store than there is at your doctor’s office.”
Dell spent two years courting Perot Systems and talking to other services providers. The company decided against pursuing a deal earlier because “it didn’t feel earlier was the right time,” Michael Dell said. Meanwhile, IBM, the leader in computer services, expanded in the market and Hewlett-Packard Co. spent $13.2 billion to buy services provider Electronic Data Systems Corp.
“Perot is a bit of a catch-up deal,” said Ben Reitzes, an analyst with Barclays Capital in New York. “It would have been better if they had done it earlier.”
Dell fell 39 cents to $15.42 yesterday in Nasdaq Stock Market trading. The shares have climbed 51 percent this year. Perot Systems, based in Plano, Texas, rose 8 cents to $29.84 on the New York Stock Exchange.
Dell, who founded the Round Rock, Texas-based company from his college dorm room in 1984, returned as CEO in 2007 after the company lost the PC market lead to Hewlett-Packard. He’s shuffled executives, fired employees, shifted away from a model of only selling over the phone and Internet, and outsourced manufacturing. He’s made about 10 acquisitions to help bolster sales and profit since 2007.
Microsoft Corp.’s release of the Windows 7 operating system on Oct. 22 should drive consumer PC purchases this year, with corporate buyers expected to follow later, Dell said.
As the economy improves, technology companies are poised to benefit from any pickup in spending, he said.
“There has been a faster-than-people-expected improvement in the broader economy, but it might be a little early to get out the celebration horns,” Dell said. “For the technology sector, the prospects are pretty good. Fundamentally we sell productivity, and if there’s anything you need in an economy that’s not that robust, it’s productivity.”
Dell also is expanding in the mobile-computing market. The company said in August that it’s developing a wireless device for China Mobile Ltd., the world’s biggest mobile-phone company by users.
“You could see us in the next year in the U.S. with some of the major carriers as well,” Dell said.
To contact the reporter on the story: Connie Guglielmo in San Francisco at email@example.com.
Last Updated: October 13, 2009 00:01 EDT