Dell News on Ulitzer

Dell this morning said it would buy Texas-based Perot Systems for $3.9 billion cash, a 68% premium.

The money for the $30-a-share tender offer will come out of Dell’s savings, which this summer amounted to $11.7 billion.

IBM turned into a services company years ago; HP bought EDS for $13.9 billion at less of a premium to compete so Dell is buying the smaller Perot to try to run against the both of them. It called the acquisition “critical.”

The combination will turn Dell into a $16 billion concern with $8 billion coming from services.

After Perot’s integration, Dell expects to make additional services- related acquisitions but not to the exclusion of other, more purely IT purchases, it said.

Perot did $2.8 billion in revenues last year, up from $2 billion in 2005. This year is proving a struggle with sales down.

Perot is a relatively lean operation but Dell, which is also up against the drop in spending, expects to wring some cost synergies out of their combined $4 billion-a-year spend.

Dell thinks it can grow Perot’s business, which is heavily healthcare and government, with 27% coming from the commercial side. Any growth would more easily come from commercial accounts, Dell’s stock-in-trade.

Michael Dell said during a conference call that Perot is the stuff of “next-generation services” that can be used to scratch the customers’ itch for virtualization and private clouds. Perot claims to have a portfolio of cloud-based solutions, the only item it specifically called out during the call.

Of the synergies imagined, hardware pull-through, Dell said, was the least of them.

Roughly half of Perot’s staff is in India and together with Dell’s people there, the combined company will have 23,000 Indian employees.

Dell has signed retention agreements with key managers beginning with Perot CEO Peter Altabef.

The acquisition is supposed to close by the end of January. Perot is not expected to contribute to Dell earnings until fiscal 2012, which begins in February of 2011.

Perot chairman Ross Perot, Jr., son of the founder, is expected to join Dell’s board once the deal is consummated.

Perot Sr., once a presidential candidate, started EDS, sold in to General Motors in 1984 and started Perot Systems in 1988.