M&A: Dell Services Group Acquired by NTT

Posted (Last updated )

** Updated 11.3.16

NTT Data closes acquisition of Dell Services, By Stephanie Condon for Between the Lines | November 2, 2016 

NTT Data closed its $3.1 billion acquisition of Dell Services on November 2, finalizing a deal that should help the Japanese company come closer to its goal of becoming one of the top five global IT services providers.

The newly acquired business will on an interim basis be called NTT DATA Services. NTT Data CEO John McCain will have overall responsibility for leading the business, while Suresh Vaswani, formerly president of Dell Services, will serve as president of NTT DATA Services.

NTT Data was already a leading firm in the IT services sector, with approximately $16 billion in global revenue and employees in more than 50 countries. However, the market has seen some notable shifts as offshore providers grow and pure cloud providers like AWS and Google gain market share. Additionally, the sector has seen other deals like NTT's acquisition of Dell Services, such as HPE's decision to spin off its IT services business and merge it with CSC...

G2X TAKE: Initially agreed to in March, the $3.1B acquisition of the services arm of this firm recently rated by Gartner as the No. 1 Global IT Services firm for Healthcare providers is a done deal.

NTT Data announced early this week that this deal with Dell Federal Service is now complete. While it is not clear if any official novation process is underway for CDC CIMS or Alliant, GSA has already made the change on their website. NTT has continued to post job openings seeking executives to lead their growth efforts and, with their new set of capabilities and capacity, this may be an interesting partner option to consider for the right opportunities. 

*Updated 3.29.16

G2X TAKE: Finalizing what we reported nearly three weeks ago, this CIO-SP3, CDC CIMS and Alliant Prime has been purchased for $3B. This moves comes as Dell works to sell off non-core assets to raise ”billions of dollars ahead of its $67bn takeover of data storage firm, EMC Corp.”

NTT seen offering $3.5bn for Dell's IT services ops - March 8, 2016, Nikkei Asian Review

TOKYO -- Nippon Telegraph & Telephone is expected to offer more than 400 billion yen ($3.52 billion) to buy Dell's IT services business in a move aimed at bolstering the Japanese company's presence abroad. NTT seeks to acquire the business, which consists mainly of Perot Systems and generates around $3 billion in annual revenue, through subsidiary NTT Data. NTT Data President Toshio Iwamoto will formally present an offer to Dell executives in the U.S. this week. NTT Data is expected to enter into exclusive negotiations on the purchase.

Parent company NTT will help finance this bid for overseas growth. While the purchase price may change before a deal is concluded, the acquisition appears likely to go down as the group's third-largest ever…

G2X TAKE: Word was leaked early this week of a planned offer and acquisition of the $3B services arm of this global product and services company who was recently rated by Gartner as the No. 1 Global IT Services firm for Healthcare. While much of the reputation that the Dell services group enjoys comes from their commercial Health IT business and as a result of their $3.9B acquisition of Perot systems in 2009, Dell maintains prime spots on several key contract vehicles and a number of contract positions across the Federal Healthcare market. Don't be surprised to see companies approach NTT to offer to take the Federal division off of their hands. 

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