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29 May 2017 05:55 (South Africa)
Business

Ross Perot makes billions on deal with Dell

  • Branko Brkic
    branko3048 a ray
    Branko Brkic

    Brkic is the founder and editor of The Daily Maverick.

    He has edited magazines on business and politics, technology, and wildlife. He has also published fiction and non-fiction books, most of them in Serbian. Though he has never pretended to be a reporter, his wide knowledge of politics (especially in America), combined with his experiences in a disintegrating Yugoslavia, gives him an unusual outlook on events in South Africa.

    Despite the vowel-poor surname, he tells anyone who asks that he hails from Hyde Park, Johannesburg, having spent most of his adult life in South Africa.

    Recent columns:

  • Business
ross perot

Somehow, he always manages to come out on top of money pile. Almost 25 years after he sold EDS to General Motors for $3Bn, Ross Perot will sell another company, Perot Systems, for $3.9Bn. The victim this time: Dell.

Dell, which has struggled with flagging sales of personal computers and servers during the downturn, has bought itself a piece of the federal government’s stimulus pie.

The company said Monday that it would spend $3.9 billion in cash to buy Perot Systems, a provider of technology services that is especially strong in the growing field of electronic health records. The government is pouring $19 billion over the next five years into technology to help doctors and hospitals digitize medical records.

Dell and Perot were already working together on some medical projects, but the combination brings tremendous firepower to the task. Perot serves 1,000 hospitals — more, it says, than any other services firm. And Perot already helps automate the patient records of 200,000 doctors.

While Dell has long taken a lean and focused approach to the computer business, devoting itself mainly to wringing the most efficiencies possible out of the manufacturing process, it has been forced to look for new ideas in recent years. The recession has hit Dell hard because it depends more than its rivals on sales to businesses, which have frozen their purchases of PCs and other data center equipment.

Dell’s largest rivals — I.B.M. and Hewlett-Packard — are leading players in computer services, which provide a steady revenue stream that is less vulnerable to the fluctuations of the economy.

Dell is paying $30 a share for Perot Systems, a 61 percent premium over the company’s closing price Friday. Some investors found that price too expensive, and Dell’s stock fell about 4 percent in Monday trading to close at $16.01.

  • Branko Brkic
    branko3048 a ray
    Branko Brkic

    Brkic is the founder and editor of The Daily Maverick.

    He has edited magazines on business and politics, technology, and wildlife. He has also published fiction and non-fiction books, most of them in Serbian. Though he has never pretended to be a reporter, his wide knowledge of politics (especially in America), combined with his experiences in a disintegrating Yugoslavia, gives him an unusual outlook on events in South Africa.

    Despite the vowel-poor surname, he tells anyone who asks that he hails from Hyde Park, Johannesburg, having spent most of his adult life in South Africa.

    Recent columns:

  • Business

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