Dell to buy SonicWall from Thoma Bravo

Tue Mar 13, 2012 2:52pm EDT
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By Monika Shinghal and Chandni Doulatramani

(Reuters) - Dell Inc said it would buy network and data security products maker SonicWall from an investor group, as the world's No.3 personal computer maker tries to tap the growing demand for online security by large companies.

Dell has been trying to boost profit margins by focusing on being an one-stop-shop for business customers and increasing exposure in enterprise solutions offerings and making its presence felt in mobile security and cloud solutions segment.

"Dell has been steadily expanding outside its traditional legacy PC markets into storage, networking and now security. There's an opportunity to have higher growth margins and higher operating margins," FBN Securities analyst Shebly Seyrafi said.

This is the first deal for Dell after it named John Swainson as its software chief last week with a mandate to expand its software capabilities.

Though financial terms of the deal were not disclosed, investors and analysts are estimating the purchase price to be between $1 billion and $1.5 billion.

On a conference call with analysts, Dell said it will fund the deal with cash but declined to divulge the purchase price.

SonicWall was a public company until 2010, when it was acquired by an investor group led by Thoma Bravo for $717 million.

Dell would use SonicWall's Unified Threat Management technology and its firewall capabilities to offer security solutions to data centers and large enterprises, analysts said.   Continued...

A worker uses a roll of plastic tape to secure Dell's screens at a street near a electronic products market in Nanjing, Jiangsu province March 7, 2012. REUTERS/Sean Yong