TCS (Tata Consultancy Services) has joined the bid to acquire Dell’s IT business, Perot Systems. A disagreement over the price had ended talks earlier. The company is now in the race with US-based Cognizant to acquire Perot.
The TCS had been showing interest to acquire Dell’s Perot Systems since last year, but re-emerged as a bidder in the last few days. According to an Economic Times (ET) report, TCS left when the asking price was too high. However, over the past two weeks there has been more movement on the price from Dell. They have yet to reach upon an agreed price.
Citing sources, Reuters also reported earlier that Cognizant Technology Solutions, NTT Data Corp of Japan and Atos SE of France are competing to acquire Perot Systems.
Dell acquired Perot for $3.9 billion (Rs 25,849.2 crore) in 2009. It had generated about $2.6 billion (Rs 17,232.8 Crore) in annual revenue when it was acquired.
During the initial talks TCS had bid below $4 billion, while Cognizant bid $4.2 billion and Atos $4.3 billion (Rs 28,500.4 crore), a report said.
The company, Dell, has also been speaking to private equity firms about selling Quest Software, which helps with information technology management, as well as SonicWall, an e-mail encryption and data security provider. Jointly, these assets could be worth around $4 billion.
Dell hopes Perot Systems will fetch more than $5 billion, helping it trim its debt load following its agreement to acquire data storage company EMC Corp for $66 billion. Dell will have $49.5 billion in debt under current plans to finance the deal. The merger with EMC is scheduled to close by October 2016, subject to approval by EMC shareholders.
TCS currently has an annual revenue of over $16 billion (Rs 1.06 lakh Crore), while Cognizant is just over $12 billion (Rs 79,536 Crore). The acquisition of Perot by Cognizant could change the standings of the IT companies in India.