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June 21, 2016

Dell sells software business to finance $67bn EMC acquisition

News: Over 180,000 customers will be transferred from Dell Software to the new owners.

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Private equity firms Francisco Partners and Elliott Management have today finalised a deal to acquire Dell Software Group, as the parent company Dell focuses on its multibillion-dollar acquisition of EMC.

The acquisition will transfer Dell Software’s security, systems and information management, and data analytics solutions to the two firms, including Dell’s Quest Software and SonicWALL.

Specific areas comprised in the portfolio include advanced analytics, database management, data protection, endpoint systems management, identity and access management, Microsoft platform management, network security, and performance monitoring.

Debt financing for the transaction was provided by Credit Suisse and RBC Capital Markets. Barclays and Citigroup acted as lead financial advisors and Shearman & Sterling, Kirkland & Ellis, and Gibson Dunn as legal advisors to Francisco Partners and Evergreen Coast Capital.

Goldman, Sachs & Co. acted as exclusive financial advisor and Simpson, Thacher & Bartlett LLP acted as legal advisors to Dell Inc.

The investment amount has not been disclosed, however, according to Wired, the acquisition is thought to be around the $2bn mark. The deal is now awaiting regulatory approval.

Dipanjan Deb, Francisco Partners’ CEO said: "Quest Software and SonicWALL provide mission-critical software to a large and loyal base of over 180,000 customers, and we see significant opportunity to build upon the company’s impressive technology and product portfolio."

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Jesse Cohn, Senior Portfolio Manager at Elliott Management. "This acquisition represents a significant deal by Evergreen Coast Capital, Elliott’s recently established Menlo Park affiliate. We look forward to working with Francisco Partners to create significant value at these companies."

Also speaking on the deal, Tom Sweet, senior vice president and chief financial officer, Dell, said that the company is looking forward to continuing to work closely with the Francisco Partners and Elliott Management teams to "further enhance the already great relationships Dell Software has with its customers and partners".

Dell, which last year announced a record breaking $67bn acquisition of storage company EMC, has also recently sold $20bn worth of bonds and its IT-Services Arm by $3.05bn.

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