U.S. giant computer maker Dell announced Monday it will buy EqualLogic, a data storage firm, for 1.4 billion dollars as part of its effort to sell more products to small and medium-sized business customers. The acquisition will be the largest ever for the Texas-based Dell and the fourth announced this year by the PC maker. The deal is expected to close by early next year.
EqualLogic, a privately-held company that had filed plans for an initial public offering, supplies systems that make it cheaper and easier for businesses to store vital data. According to Dell, EqualLogic''s technology constitutes the fastest segment of the storage market. Dell, whose dominance in the PC and server market has been recently replaced by rival Hewlett-Packard, is seeking to bolster its storage business and generate more sales among medium-sized businesses or smaller. The new acquisition effort represents the latest of a series of attempts by Dell to reach out to the market with products specifically designed for small and medium-sized businesses, instead of with devices merely reconfigured from larger-market products.
Although Dell is paying a relatively hefty price for EqualLogic, which currently has more than 300 employees and reported 68 million dollars in sales last year, it might have been forced to pay more if it waited too long. EqualLogic filed plans last month to raise 125 million dollars via an IPO, and the successes of other data storage providers in the stock market suggest that investors would give the company a high valuation.
EqualLogic, a privately-held company that had filed plans for an initial public offering, supplies systems that make it cheaper and easier for businesses to store vital data. According to Dell, EqualLogic''s technology constitutes the fastest segment of the storage market. Dell, whose dominance in the PC and server market has been recently replaced by rival Hewlett-Packard, is seeking to bolster its storage business and generate more sales among medium-sized businesses or smaller. The new acquisition effort represents the latest of a series of attempts by Dell to reach out to the market with products specifically designed for small and medium-sized businesses, instead of with devices merely reconfigured from larger-market products.
Although Dell is paying a relatively hefty price for EqualLogic, which currently has more than 300 employees and reported 68 million dollars in sales last year, it might have been forced to pay more if it waited too long. EqualLogic filed plans last month to raise 125 million dollars via an IPO, and the successes of other data storage providers in the stock market suggest that investors would give the company a high valuation.
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