NTT Data Corporation To Purchase Dell IT Service Businesses

NTT's IT division will purchase the IT service business of Dell to expand its sales outside Japan

NTT Data Corporation has agreed to purchase the IT services business of Dell for a sum of $3.06 billion as it extends sales outside Japan. The purchase would be the telephone company’s biggest up till now, extending reach to the United States and markets abroad to counter slow economic growth rate at house.

In the meantime, Dell is spinning of some assets before it completes its own record agreement – the $67 billion worth acquisition of storage and software systems provider, EMC Corporation. The Michigan based organization paid a sum of $3.9 billion to purchase Perot Systems 7 years ago with plans to grow in the rapidly growing data services market.

The information technology company, Perot systems, established by the billionaire H. Ross Perot who ran for the post of US president in 1992 and 1996, has been awarded government contracts for medical work and IT services for the US Defense Department, Homeland Security, Education department and NASA.

Perot Systems is now a part of Dell Services. The computer manufacturer has previously said it might spin of a number of its businesses before its merger with EMC. The agreement with the NTT reflects that, the company stated on March 28, 2016.

The merger of EMC and Dell – the largest in the technology sector on record – is yet to be completed in late 2016 in the third financial quarter. NTT’s consulting and IT division, has paid over $634 million (72 billion Yen) to purchase businesses since 2011, around $550 million overseas, as revealed via data gathered by Bloomberg. Sales outside Japan increased to $3.96 billion by March 31, 2015, compared with over $1.83 billion in the year ending in March 2012.

Foreign competitors of the telephone company, including Atos SE, Tata Consultancy Services Limited and Cognizant Technology Solutions Corporation had also earlier taken part in an auction for the American IT services provider that was unable to generate a deal, revealed Re/code, Reuters and Nikkei, which all referred to people aware of the matter.

NTT Data is taking over the division of the computer maker to strengthen its foothold in North America. It outsourced business and improved cloud service. The organization will recruit 28,000 workers located mainly in India and North America from Dell.

The shares of the NTT Data slightly changed at $49.32 on March 18, 2016 in Tokyo. They have plunged by 3.55% up till now in 2016.

The Japanese organization’s systems unit has grown by more than double in terms of its market value since 5 years ago due to healthcare and financial organizations using the software and datacenters of the company.