Dell Sweetens 3Par Bid to $24.30 Per Share - $1.6B

August 26, 2010

3PAR has accepted Dell's increased offer to acquire the storage provider for $24.30 per share in cash, or approximately $1.6 billion, net of 3PAR's cash.

Dell had previously signed an agreement to acquire 3PAR for $18 per share, with a provision for matching competing bids.

The merger agreement includes a revised termination fee of $72 million, which is payable in the event that 3PAR receives and accepts another unsolicited acquisition proposal that its board determines to be superior to Dell’s increased offer.

The sweetened bid was made in response to Hewlett-Packard's Monday bid of $24 per share. After HP made its bid, 3Par gave Dell three days to produce a better offer.

Over the past several years, Dell has invested heavily in the IP and infrastructure necessary to provide customers with a comprehensive and differentiated set of storage solutions. The 3PAR acquisition complements and extends the breath of Dell’s storage portfolio. Dell’s capabilities offer customers a unified enterprise environment that includes all storage categories from direct attached storage (DAS) to fibre channel.

Dell believes that its global brand and broad global customer reach will dramatically accelerate 3PAR’s revenue growth. Dell has a demonstrated commitment and track record in integrating and growing acquired companies and nurturing their entrepreneurial and innovative cultures, as illustrated by the dramatic growth of the EqualLogic iSCSI storage business over the last three years.

Dell is committed to providing its data center customers with open, capable and affordable solutions. “Storage is at the forefront of this strategy,” said Dave Johnson, senior vice president, Dell corporate strategy. “With the 3PAR acquisition, Dell with have the broadest set of differentiated storage solutions in the market today.”

The cash tender offer, through a wholly-owned Dell subsidiary, is for all outstanding shares of 3PAR common stock, without interest, and subject to reduction for any federal back-up withholding or other taxes. The offer documents will be amended to reflect the new offer price, but this will not alter the timing of the acquisition. Unless extended, the tender offer and any withdrawal rights to which 3PAR stockholders may be entitled will expire at midnight, EDT, on Sept. 20, 2010. Following acceptance for payment of shares in the tender offer and completion of the transactions contemplated in the merger agreement, 3PAR will become a wholly-owned subsidiary of Dell.

The transaction, which is subject to government approvals and the satisfaction of other customary conditions, is expected to close before the end of the year. Based on current estimates, the transaction is expected to be accretive to Dell non-GAAP earnings by its Fiscal Year 2012.