NTT Data to buy Dell's IT services business for $3bn

As Dell looks to shift its non-core assets ahead of the EMC deal, Japanese giant NTT Data agrees to buy Dell Services for $3.05bn

Japan’s NTT Data announced on Monday that it is to acquire Dell Services for somewhere in the region of $3.05bn.

Already one of the largest technology services companies in the world, NTT Data has been looking to expand its stateside operations in healthcare IT, insurance and financial services consulting. The $3bn price tag, which excludes debt and unspecified advisory fees, will buy NTT Data a strong foothold in the United States.

"NTT Data is pleased with the unique opportunity to acquire such high-caliber talent, and a corporate culture that shares common values with NTT DATA, with emphasis on ‘Clients First,’ ‘Foresight,’ ‘Teamwork,’ and a commitment to innovation," said Toshio Iwamoto, president and CEO of NTT Data Coproration. "Welcoming Dell Services to NTT DATA is expected to strengthen our leadership position in the IT Services market and initiates an important business relationship with Dell."

John McCain, CEO of NTT DATA, Inc., the man responsible to for the company’s US operations, will have overall responsibility for leading the combined business. NTT Data will take on the 28,000 Dell Services employees located in North America and India.

"I’m extremely proud of Dell Services’ solid growth, broad capabilities and deep domain expertise in Healthcare & Life Sciences, Banking, Financial Services and Insurance. Our investments in digital services, application modernization, tools, automation and ’as-a-service‘ models, have enabled Dell Services customers to simplify their IT environment, empower their workforce, engage their customers and grow," said Michael Dell, chairman and chief executive officer of Dell. "Together, NTT DATA and Dell Services will be a winning combination for Dell Services customers, team members and partners."

The significance of the deal for NTT Data is likely to be overshadowed by its impact on Dell. With only weeks left until the EMC shareholder vote on the acquisition, yesterday's deal will be seen as an important win.  

Dell has been trying to generate cash by shifting surplus to requirement businesses ahead of the deal. Selling off Dell Services, formerly Perot Systems, will account for roughly 7% of the $43bn worth of debt that the Round Rock, Texas-based company will take on, should it purchase the storage giant.

Dell has also been in talks to purge itself of IT management provider Quest Software and data security provider SonicWall. The two companies combined are worth an estimated $4bn.

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