Japan's NTT Is Close to Buying Dell Services for About $3.5 Billion

Dell is nearing a deal to sell its IT services business unit to the Japanese telecom giant NTT for about $3.5 billion.

NTT executives are expected to formalize their offer in a meeting with Dell CEO Michael Dell in New York on Wednesday. If successful, the deal would close a process that began in December when privately held Dell set out to sell its services unit — made up primarily of the company formerly known as Perot Systems, which Dell acquired in 2009 for $3.9 billion.

Dell is in the process of acquiring EMC, the data storage equipment company, in a deal that when first announced in October was worth about $67 billion. Dell has proposed to pay for the deal by taking on more than $50 billion in debt.

The sale of the services unit is considered part of an effort to raise cash that will ultimately help pay that debt down. Other assets, including some software operations like Quest and SonicWall, are said to be still in play. Dell hopes to raise as much as $10 billion from asset sales.

A spokesman for Dell didn’t return messages seeking comment. A spokesman for Silver Lake, the private equity firm that is a minority owner of Dell, declined to comment.

Before NTT, at least two other bidders came close to buying the business. Atos, a French IT outsourcing firm with offices in Purchase, NY, and Arlington, Texas, was a leading contender as recently as January. Atos had considered paying more than $4 billion in a stock transaction, but those talks ended after its share price declined significantly, sources tell Re/code. Talks with TCS, a subsidiary of India’s Tata Group, ended in December after the parities couldn’t agree on a price.

Before its acquisition by Dell, Perot Systems was an IT services company founded by the billionaire and onetime U.S. presidential candidate Ross Perot. It handles the technology needs of several federal government agencies and health care providers.

This article originally appeared on Recode.net.

Explanatory journalism is a public good

At Vox, we believe that everyone deserves access to information that helps them understand and shape the world they live in. That's why we keep our work free. Support our mission and help keep Vox free for all by making a financial contribution to Vox today.

One-Time Monthly Annual

$95/year

$120/year

$250/year

$350/year

Other

$

Yes, I'll give $120/year

Yes, I'll give $120/year

We accept credit card, Apple Pay, and Google Pay. You can also contribute via