Dell to Acquire Compellent for $960m



Via News Release

“Texas-based Dell (NASDAQ: Dell) and Eden Prairie’s Compellent Technologies, Inc. (NYSE: CML) today announced they have entered into a definitive agreement for Dell to acquire Compellent, a rapidly growing provider of highly-virtualized storage solutions.

Under terms of the agreement, approved by the boards of directors of both companies, Dell will pay $27.75 per share in cash for each share of Compellent for a total equity value of approximately $960 million, and aggregate purchase price of approximately $820 million, net of Compellent’s cash. The transaction, which is subject to approval by Compellent’s shareholders and customary closing conditions, is expected to close in early 2011.”

The deal comes as Dell, HP, and IBM have all chased acquisitions in data storage over the past year.  After a failed bid to acquire 3Par earlier this summer (lost to HP – $2.35b), Dell was at risk of being on the outside of the storage pack.  There does exist the possibility of a counter-offer similar to that of the HP/DELL/3Par saga by another player (Oracle?).

News of the talks was made public just last week; Dell said it plans to keep Compellent’s existing operations in Eden Prairie. All said and done, the acquisition will provide a liquidity windfall for early investors and key executives.

For an inside track on the origins of this Minnesota success story, see our recent Executable interview with Founder & CEO Phil Soran.