Dell is reportedly trying to close a deal with Japan's NTT Data, a subsidiary of telecom company NTT, on the sale of its IT services unit for the price of $3.5 billion.
Established in 2009, Dell's IT division was formed after the U.S.-based company acquired Perot Systems in a deal that was valued at $3.9 billion. Perot Systems was founded in 1988 by Ross Perot, a former candidate in the U.S. presidential race.
Selling its IT business to NTT Data will allow Dell to shave off some of its $43 billion worth of debt from its pending acquisition of EMC Corp., which will reportedly reach up to $60 billion once it is finalized.
The EMC acquisition deal, according to Reuters, will be backed by Michael Dell, founder and chief executive of Dell, along with Silver Lake Partners, a private equity company. The deal is expected to earn approval from EMC shareholders when they hold a vote in May. Once approved, the transaction may reach its full terms of agreement between July and October.
The Dell-EMC tie-up, once completed, can be considered one of the biggest tech tie-ups that has ever been witnessed to date.
Dell had also syndicated $10 billion of the needed financing for the EMC deal, which is otherwise known as "term loan A." It is expected that the number will rise by $500 million to $750 million because of the strong demand. Dell plans to use the extra money as a way to downsize the remaining $33 billion financing that is needed in the deal.
Dell's IT division is a major technology consulting provider to a number of hospitals and government offices. In the past years, Dell has started selling some of the unit's operations and integrating some that were not part of the sale. The company began to see some redundancy in the division's capabilities following its acquisition attempt on EMC.
Apart from selling its IT services unit, Dell is also in talks with private equity firms on the possible sale of its information technology management arm Quest Software and the company's email encryption and data security services SonicWall. The paired deal is said to have a valuation of up to $4 billion.
Dell is yet to announce an agreement on the deal with NTT Data, but the latter's board is expected to approve the offer soon enough, in a meeting that is set to take place in Tokyo.
