Dell to acquire Perot Systems

By Eric Wicklund
11:15 AM

Just two weeks after announcing the launch of its own electronic medical records platform, Dell has acquired the IT solutions provider to deliver and maintain the platform.

The Round Rock, Texas-based computer giant on Sept. 21 announced plans to acquire fellow Texas company Perot Systems in a deal valued at roughly $3.9 billion. Perot, based in Plano, provides a wide range of IT services, including applications, technology, infrastructure, business processes and consulting.

The second-largest maker of personal computers behind Hewlett-Packard, Dell has reportedly been eyeing several healthcare-related investments for some time. Earlier this year, the company hired a new mergers and acquisitions chief from IBM, and it has raised almost $1 billion in debt since March.

Analysts had mixed opinions on the merger. Many say the acquisition gives Dell a solid footing in the healthcare market and boosts its services revenue, but they wonder if Perot – which has made 21 acquisitions and taken stakes in three companies since 1996 – will integrate well.

“We consider Perot Systems to be a premium asset with great people that enhances our opportunities for immediate and long-term growth,” said Michael Dell, Dell’s CEO and board chairman. “This significantly expands Dell’s enterprise-solutions capabilities and makes Perot Systems’ strengths available to even more customers around the world. There will be efficiencies from combining the companies, but the acquisition makes such great sense because of the obvious ways our businesses complement each other.”

“Jointly we have developed IT-centric solutions and innovative services for our shared customers – particularly in the healthcare and federal government market segments,” Dell told investors during a conference call.

“This transaction represents a great opportunity for our company and our associates,” added Ross Perot Jr., Perot’s chairman of the board. 

Under terms of the deal, Dell will begin a tender offer to acquire all of Perot’s outstanding Class A common stock for $30 per share in cash. Once the acquisition is completed, Perot will become Dell’s services unit and be led by Peter Altabef, Perot’s current CEO.

Earlier this year, Dell and Perot announced a strategic alliance to provide full integrated IT solutions to healthcare organizations seeking to qualify for federal stimulus funding through the American Recovery and Reinvestment Act (ARRA). Included in that partnership was a financing program to Perot’s healthcare clients through Dell Financial Services.

“The stimulus plan can have a far-reaching, positive impact on the quality of healthcare in our nation, and these financing options will help some clients bridge the gap between current investment needs and meeting the requirements necessary to take full advantage of the funds that become available in 2011,” said Chuck Lyles, president of Perot Systems’ healthcare group. “Perot Systems collaborated with Dell to help make that happen - to give healthcare providers the financial tools they need to accelerate their IT projects.”

Perot also recently announced that it was expanding its MEDITECH Solutions Group in Canada to better address the Canadian healthcare market.

On Sept. 10, Dell officials announced the launch of an EMR system for hospital-affiliated physician practices, with Tufts Medical Center in Boston and the Memorial Hermann Healthcare System in Houston as early adopters. The company’s goal is to target the roughly 90 percent of U.S. physicians who haven’t adopted a fully functional EMR and practice management system.

“The U.S. healthcare system is suffering from a digital divide that we can no longer afford,” said Jamie Coffin, MD, vice president of Dell’s healthcare and life sciences division, at that time. “With our hospital partners we are knocking down EMR’s barriers to accelerate its adoption, and in doing so we’ll create the communities of practices and information-sharing infrastructure necessary to achieve reform priorities today and personalized medicine in the future.”

 

Want to get more stories like this one? Get daily news updates from Healthcare IT News.
Your subscription has been saved.
Something went wrong. Please try again.