Dell Buys Data Storage Company 3PAR

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Dell announced today that it has reached an agreement with the California based data storage company 3PAR , to purchase the company for a total price tag of $1.15 Billion.

Dell hopes that this move will help the computer giant cut its own data storage costs by as much as 50%. This purchase comes two years after Dell acquired another storage data firm, Equal Logic, in 2008. Dell also has an ongoing partnership with EMC, a storage networking firm, which is helping to give Dell the beginnings of a nice corner on the data storage market.

As part of the deal, Dell agreed to make a tender offer for 3PAR's commonly held stock at a rate of $18 per share, which is nearly double the closing rate for 3PAR stock on Friday which was at $9.65. Dell plans to close on the deal by the end of the 2010 and they are forecasting that the company should see earnings from the purchase adding to Dell's 2012 fiscal year. 3PAR was chosen by Dell, in part, because they have utilized an innovative storage platform which is “designed to overcome the limitations of traditional modular and monolithic arrays.” This reduces both administrative costs and physical infrastructure costs. Additionally, the 3PAR model reduces energy needs which not only means that energy costs are lowered leading to a bigger bottom line, but that operations will consume less energy making it a greener move as well as a profitable one which could help Dell appeal to more consumers.

Such a lucrative deal may help to restore some of the confidence that Dell customers and share holders have been loosing during the recent legal battle with Advanced Internet Technologies (AIT) , a dispute that began in 2003 over the OptiPlex computers that Dell sold which allegedly had faulty capacitors that caused major damage to the machines' motherboards. AIT is accusing Dell of failing to comply with a court order to release secret documents that, they say, proves that Dell executives knew about the problems and tried to cover it up. With this new purchase, Dell may be hoping that their shareholders will be seeing dollar signs and forget about the companies current legal troubles.

GoodLuckChuck 0 Junior Poster in Training

Are you sure it is $1.5 billion? I was in the process of DIGGing this article and another one said $1.15 billion. I will say over $1 billion to be safe. These guys say $1.15 billion: http://www.mizozo.com/biz/08/2010/16/dell-acquires-data-storage-provider-3par-for-1.15-....html

has agreed to buy data storage provider 3Par Inc. for about $1.15 billion,

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