The sale will offer NTT Data a bigger foothold in the US, where it is looking to expand in healthcare IT, insurance and financial services consulting.
Japan's NTT Data Corp said on Monday it has agreed to buy Dell Inc's information technology consulting division for over $3 billion to expand in North America and bolster its services business.
The move will allow US computer maker Dell to trim some of the $43 billion (Rs 2.86 lakh crore) in debt it is taking on to fund its pending cash-and-stock acquisition of data storage provider EMC Corp, a deal worth close to $60 billion (Rs 3.99 lakh crore).
The sale will also offer NTT Data, one of the world's largest technology services companies, a bigger foothold in the US, where it is looking to expand in healthcare IT, insurance and financial services consulting.
Dell has also made progress in syndicating $10 billion (Rs 66,527.5 crore) of its financing package for the EMC acquisition dubbed 'term loan A', the people said. This is expected to be increased in size by $500 million (Rs 3,326.4 crore) to $750 million (Rs 4,989.6 crore) due to strong demand, with the extra money to be used to downsize some of the more expensive tranches of the remaining $33 billion (Rs 2.19 lakh crore) in financing, the people added.
The group of banks participating in the term loan A has been expanded from the original eight underwriters to 25, with more expected to join before the syndication is completed in the next week, the report said.
Dell declined to comment, while NTT Data did not immediately respond to a request for comment. Reuters had reported first on February 12 that NTT Data was in exclusive talks to buy Dell's IT services unit.
Formerly known as Perot Systems, Dell's IT services division is a major provider of technology consulting to hospitals and government departments. Founded in 1988 by former US presidential candidate Ross Perot, it was acquired by Dell in 2009 for $3.9 billion (around Rs 25,945.7 crore).
However, Dell has since divested some of the unit's operations and integrated some others, which it is not including in the sale. Some of the unit's capabilities were seen by Dell as redundant in the wake of the acquisition of EMC.
Dell has also been speaking to private equity firms about selling Quest Software, which helps with information technology management, as well as SonicWall, an e-mail encryption and data security provider, Reuters has previously reported. Together, Quest and SonicWall could be worth up to $4 billion (Rs 26,611 crore).
Dell's acquisition of EMC, which is backed by founder and Chief Executive Michael Dell as well as private equity firm Silver Lake Partners, is subject to approval by EMC shareholders. EMC is expected to hold a shareholder vote on the Dell deal in May, allowing for the transaction to be completed sometime between July and October.
(With Inputs from Reuters)
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