Dell announced plans Monday to buy 3PAR for about $1.2 billion in cash, or $18 a share. 3PAR’s shares were recently up 87% at $18.01, while Dell was down 4 cents at $11.97.
Dell will add a premium storage product to its portfolio which will reduce data management costs in the future. Projections are that this acquisition could reduce these costs for Dell by up to 50 percent. It will also increase Dell’s competitive edge in the storage market. 3Par has well respected products but has failed to attract fiercely loyal IT purchasers. Dell’s broad distribution network should fill the gap enabling 3Par to reach its full potential.
It is a good fit for both companies. Dell will be more competitive with IBM and Hewlett-Packard and 3Par will have wider distribution and name recognition.
The deal is expected to be completed by the end of the year.
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