Computer maker Dell has announced it is in “advanced discussions” to acquire enterprise-level storage firm Compellent in an all-cash deal that would value Compellent at $27.50 per share. Although that price is below Compellent’s current closing price, industry watchers believe that Compellent’s price has been artificially inflated on rumors of a deal. If the merger goes through, the deal would probably ring up between $875 and $900 million.
The news comes as Dell struggles to build up its enterprise storage business. Dell is currently the number five storage vendor amongst enterprises and folks who build out those gigantic data centers that power everything from YouTube and Facebook to Flickr and Netflix. Dell recently lost a bidding war with Hewlett-Packard to acquire storage vendor 3Par, and there are comparatively few remaining acquisition targets left in the industry that Dell could use to bolster its business.
Although Dell’s storage solutions have been built around a long-term relationship with EMC and EqualLogic, Compellent offers a scalable network storage solution dubbed “Fliud Data Storage” built on cloud-based virtual storage solutions and aimed at reducing management costs. Compellent also offers enterprise level SAN storage solutions.
Dell has made other recent acquisitions in a move to bolster its storage business, including Ocarina Networks (which focuses on de-duplication and compression) and scalable NAS provider Exanet.