PC maker Dell Inc. (DELL) said Monday that it will acquire technology services company Perot Systems Corp. (PER) in a $3.9 billion cash deal.
Dell will pay $30 per share in cash for Perot Systems, a company founded by former independent presidential candidate H. Ross Perot, which represents a massive 68% premium over PER's Friday closing price. CEO Michael Dell said that the acquisition will be an "anchor" for the company's global I.T. business. Perot Systems provides tech services to a wide range of customers, including governments, health care companies, and the military.
Dell's main rival in the PC market, Hewlett-Packard (HPQ), had bought a separate Perot-founded company, Electronic Data Systems, last year for $13.9 billion.
Dell's purchase of PER is expected to close by the end of January. Once completed, Perot Systems will become Dell's service unit. Dell said it will look to retain Perot CEO Peter Altabef, and will also consider Ross Perot Jr. for a director position at Dell.
Dell shares fell 68 cents, or -4%, in morning trading Monday, while Perot Systems shares rocketed up $11.72, or +65%.
The Bottom Line
Shares of Dell (DELL) have been approaching 52-week high levels in the $17 price area. The stock has technical support in the $14-$15 price area. If the shares can firm up, we see overhead resistance around the $17-$18 price level. We do not currently rate this non-dividend paying stock, but we do follow this tech giant closely.
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