Seattle: Dell Inc, beaten by Hewlett-Packard Co in an 18-day bidding war for data-storage provider 3Par Inc, is likely to pursue other targets that would help it vie with market leaders including EMC Corp.
"We do plan to continue to look to grow organically, but also take a look at strategic acquisitions," David Frink, a Dell spokesman, said. He declined to discuss possible targets.
HP clinched its purchase September 2 with an agreement to pay $33 (Dh121.206) a share, or $2.35 billion. Dell, with $12 billion in cash on its balance sheet and a $72 million breakup fee from 3Par, is scouting for companies that will help it move into higher-margin products, including storage, technology services, networking and software, the company has said.
3Par would have helped Dell compete more effectively with EMC, International Business Machines Corp and Hitachi Ltd in the $19 billion market for external disk drives, said Roger Cox, an analyst at Gartner Inc in San Jose, California. Runners-up include Pillar Data Systems Ltd, Xiotech Corp and Compellent Technologies Inc, Cox said.
Closely held Pillar, which makes storage systems for databases and files, has revenue of more than $50 million a year and is about 85 per cent-owned by Larry Ellison, Oracle Corp's chief executive officer, said Pillar CEO Mike Workman.
"We're not looking for a deal, but we're all capitalists, and if the right deal came along we'd listen," Workman said. He declined to comment on whether the San Jose, California-based company has spoken with Dell.
Dell gained 23 cents, or 1.9 per cent, to $12.59 yesterday in Nasdaq Stock Market trading. The shares have fallen 12 per cent this year. HP advanced 66 cents, or 1.7 per cent, to $40.34 in New York Stock Exchange composite trading. The stock has dropped 22 per cent this year.
Xiotech, based in Eden Prairie, Minnesota, sells storage "blades" that pack together high-capacity disk drives and help customers make better use of storage capacity, said Brian Reagan, chief marketing officer at the closely held company. He said there haven't been discussions with Dell.
