The acquisition would extend a recent string of deals in the data storage industry as tech firms position themselves to help big companies and government agencies deal with ever increasing amounts of digital information. Dell, like its competitors, is eyeing cloud computing, a massive shift just under way in data-center technology toward online data storage, as the next area of rapid growth and sweeter profits.
Dell fell short in its effort to expand in the storage business earlier this year when it lost the bidding for 3Par Inc. to rival Hewlett Packard Co., which ended up paying $2.35 billion. The company already offers a lower-end storage product thanks to its 1.4 billion acquisition of EqualLogic in 2007.
Now, Dell said it has a tentative agreement to buy 3Par competitor Compellent Technologies Inc., which is based in Eden Prairie, Minn., for $27.50 per share. The company cautioned that a deal may still not happen.
"Dell is clearly changing as a business and evolving into much more of an IT (information technology) solutions provider," Chairman and CEO Michael Dell said Thursday. "If you think about five years ago, we would have a series of ingredients that we would sell to customers — notebooks, desktops, servers. Those are all kind of necessary ingredients. But where Dell is actually evolving is much more as a solutions provider. And to do that we need many more new capabilities and ingredient technologies and intellectual property."
Investors appear to have already anticipated a takeover offer — and perhaps a fatter premium for the shares than Dell put forward.
Dell's offer represents an 18.2 percent discount to Compellent's closing share price Wednesday of $33.65. The stock tumbled $4.65, or 13.8 percent, to $29 in midday trading, but remained above the offer price. Dell shares edged down 2 cents to $13.66.
The world's biggest technology providers have been stepping up acquisitions to make sure they can offer a full package of hardware, software and services for the back-office operations of big customers.
Dell has fallen behind HP in broadening its offerings — more than half of its revenue still comes from selling personal computers, a niche where profit margins have shrunk because of low prices and the increasing cost of components. But the PC maker has acquired several companies to expand its product line recently, including Boomi, a cloud software integration platform, Ocarina Networks, which makes data compression technology, and Kace, which helps customers manage the various hardware and systems on their networks.
Dell's largest acquisition to date was Perot Systems, a technology services provider it acquired in 2009 for $3.9 billion.