Dell has confirmed that it is looking into buying data storage vendor Compellent for $876m (£553m).
The company lost out to HP on a recent bidding war over storage vendor 3PAR, and is looking to bolster its credentials in the enterprise storage space. Compellent is also a key player in virtualised storage.
"Dell and Compellent have entered into an exclusivity agreement to negotiate a merger agreement in which Dell would acquire all of the outstanding common stock of Compellent at a price of $27.50 per share in cash," said Dell in a statement.
"There can be no assurances that an agreement will be reached or that a transaction will be consummated. Dell and Compellent do not intend to comment further until an agreement is reached or discussions are terminated."
The bid is unusual in that Dell is offering to buy the company at around 20 per cent less than the publicly quoted price, and shares in Compellent fell on news of the bid.
Nevertheless, the offer looks likely to go ahead given Dell's weakness in storage technology for the enterprise.
"Compellent was the most likely choice partly because there aren't that many options left for proven independent storage vendors," said Andrew Reichman, senior analyst at Forrester Research, in a blog post.
"Compellent has offered a disruptive technology in the mid-range storage space, with a highly virtualised product. What Compellent doesn't offer is big enterprise credibility.
"They have traditionally targeted the small to medium enterprise segment, and have lacked the scalability, big IOPS performance and five-nines availability needed to get firmly into true enterprise environments."
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