Confirmed: Dell Buys Storage Company Compellent For $820 Million In Cash

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Dell has officially announced that it aims to pick up Compellent, a provider of storage solutions with automated data management features for enterprise and cloud environments, for $27.75 per share in cash for each share of Compellent (a total equity value of approximately $960 million).

The aggregate purchase price is about $820 million, net of Compellent’s cash.

This is slightly more than what Dell initially named as the terms of the merger agreement last week.

The transaction, which has been approved by both companies’ boards but is still subject to approval by Compellent’s shareholders and customary closing conditions, is expected to close in early 2011.

Obvious sidenote to be made: Dell recently lost a bidding war for storage provider 3PAR, against HP.

Press release:

Dell to Acquire Compellent

Fast-Growing Compellent Technologies, Inc. Provides an Intelligent, Powerful and Easy to Use Virtualized Storage Platform

Compellent’s Channel Focus Will Further Extend Dell’s PartnerDirect Relationships, Offering New Set of Storage Products to All Members

Transaction Expected to Be Accretive to Dell Non-GAAP Earnings in Its Fiscal Year 2012

ROUND ROCK, Texas & EDEN PRAIRIE, Minn.–(BUSINESS WIRE)–Dell (NASDAQ: DELL) and 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 with automated data management features, including tiering and thin provisioning, for enterprise and cloud-computing environments.

The acquisition is the latest strategic investment by Dell as it expands its portfolio of enterprise-class storage solutions and is consistent with Dell’s strategy to help customers better manage data growth, reduce storage costs and dramatically simplify the management of IT infrastructure.

“Compellent’s design focus on intelligently managing data to increase efficiency, agility and resiliency is consistent with Dell’s approach of building solutions that can quickly scale to meet the most demanding enterprise environment.”

The acquisition of Compellent will deliver on Dell’s commitment to provide its customers solutions that are open, capable and affordable. Dell delivers an open and integrated approach to data management that drives efficiency and dramatically reduces costs by streamlining operations.

Upon closing the transaction, Dell will quickly make Compellent an integral part of its industry-leading storage portfolio, including PowerVault, EqualLogic and Dell/EMC. Compellent expands Dell’s award-winning storage solutions, which now offers customers innovative systems and choice at every storage tier, from direct-attach to highly-virtualized SANs.

Dell also plans to keep Compellent’s existing operations in Eden Prairie, Minn., and will invest in engineering, support, operations and sales capability to grow this business.

Compellent sells its solutions through an extensive network of channel partners. Dell plans to maintain and enhance the strong channel program that Compellent has developed. Dell also signed a reseller agreement with Compellent that extends the storage portfolio it can offer its worldwide customer base, effective immediately.

Quotes

“Compellent is a natural complement to Dell’s expanding enterprise storage portfolio. The Compellent storage platform will enable Dell to provide customers additional mid- and high-end network storage solutions that simplify and reduce the cost of data management,” said Brad Anderson, senior vice president, Enterprise Product Group. “Compellent’s design focus on intelligently managing data to increase efficiency, agility and resiliency is consistent with Dell’s approach of building solutions that can quickly scale to meet the most demanding enterprise environment.”

“We are excited about our merger with Dell. This is the next logical step in our goal to scale our products, channel and team worldwide,” said Phil Soran, President, CEO and Chairman of Compellent. “With Dell’s scale and technology leadership, we accelerate the adoption of our virtualized platform, Fluid Data, to redefine the value of enterprise storage for data centers and cloud computing.”

Terms and Closing

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.

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