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The deal is done: Dell is buying Compellent

Christmas comes early in Minneapolis

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The deal is on: Compellent has agreed to be bought by Dell for $27.75/share.

That makes a total equity value of approximately $960m, or about $820m, net of Compellent’s cash. The transaction is subject to approval by Compellent’s shareholders and is expected to close in early 2011.

The price is $0.25 higher than the price offered by Dell before the weekend, meaning Dell is spending about another $84m to buy Compellent; the due diligence must have turned up another jewel or two in Compellent's crown.

As expected Dell plans to keep Compellent’s existing operations in Eden Prairie, Minnesota, and will invest in engineering, support, operations and sales capability to grow this business.

Attention will now turn to the detailed positioning of the Compellent storage and the existing iSCSI-focused Dell EqualLogic arrays, and also to how Dell will deal with its co-branded CLARiiON arrays from EMC. Dell's statement said: "Upon closing the transaction, Dell will quickly make Compellent an integral part of its industry-leading storage portfolio, including PowerVault, EqualLogic and Dell/EMC."

The expectation is that the CLARiiON relationship with EMC will quite quickly shrivel and die, although other EMC products sold through Dell will most probably continue.

El Reg expects Dell processor boards to replace the existing SuperMicro ones in Compellent's Storage Centre. It also expects an onslaught of Dell love for Compellent's channel partners as retaining and growing those will be vital for the Compellent operation.

We also expect Dell to help Compellent scale its Storage Centre offering's functionality to make it more attractive to enterprise buyers. For existing Compellent users there should be no change, except perhaps a reinforced feeling that, yes, they did buy a good piece of kit. ®

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