Report: Cognizant, NTT, Atos Compete To Buy Perot Systems From Dell

Cognizant Technology Solutions Corp., NTT Data Corp. and Atos are fighting to acquire Perot Systems, but they aren't putting up the kind money Dell was hoping to get for the IT services business, according to a Reuters report.

Dell acquired Perot in 2009 for about $3.9 billion, and it's one of several businesses Dell has put on the block as it prepares for its $67 billion acquisition of EMC.

However, the three companies vying for Perot, an IT services business Dell acquired in 2009, have so far not offered the more-than $5 billion Dell had expected, prompting Dell to reconsider which contracts it will pass on to Perot in order to reinvigorate the sale, according to Reuters.

Related: Dell SecureWorks Officially Files For IPO -- Welcome News For Partners

New Jersey-based Cognizant is an IT consulting and outsourcing firm. Atos is a French IT outsourcing firm. NTT is a Japan-based systems integrator.

Along with Perot, Round Rock, Texas-based Dell is also shopping its Quest Software and SonicWall security businesses to private equity firms at about $4 billion each in an effort to raise close to $10 billion, which will offset the nearly $50 billion in debt the company will take on to finance the EMC acquisition.

The EMC acquisition is expected to close between May and October 2016, and Dell CEO Michael Dell has said he intends to aggressively pay down the debt used to finance the transaction in the first 18-24 months after it closes. In a recent U.S. Securities and Exchange Commission filing, Dell said it and EMC have together committed about $7.7 billion in cash to help finance the merger.

Dell used a similarly aggressive strategy in the nearly $25 billion leveraged buyout that took the company private in 2013. Since then, Dell has paid down about $4.5 billion in debt, and is still carrying about $11 billion in debt related to that transaction.

Dell last week filed for an Initial Public Offering of its SecureWorks security business. The valuation of that business is said to be in the $2 billion range. Dell bought SecureWorks in 2011 for $611 million.

Partners welcomed the SecureWorks IPO, and were equally enthusiastic about the prospect of a Perot sale. Dell partners in recent months have told CRN they welcome the divestitures, saying jettisoning some business units will help focus Dell after the EMC acquisition.

Dan Serpico, president of FusionStorm, a large San Francisco, Calif.-based Dell partner, said without Perot, Dell would have more room to business with large VARs, like FusionStorm.

"It suggests Dell will have more money post-transaction for R&D, and selling off Perot should open up more opportunity for value-add resellers to provide services," Serpico said. "In the end, it should create more synergy between Dell and its partners."

Dell declined to comment for this story. Cognizant, NTT and Atos did not respond to requests for comment before press time.