Dell (DELL) Looks To Buy Rather Than Build For Growth

This morning the Wall Street Journal had a story that said Dell Inc. (Nasdaq: DELL) is looking to rev up its mergers and acquisitions engine. Dell's CEO Michael Dell expects his company to acquire a "significant-sized company" in coming months, according to the Journal.

Dell wants to expand its data-storage and tech-services businesses, according to people who have recently spoken with its CFO, Brian Gladden.

Dell is taking steps to rev up the M&A engine, such as on Wednesday, it added more firepower by selling $1 billion in bonds, which adds to its war chest of $9 billion in cash. Additionally, Dell hired a high-profile M&A executive, David Johnson, from IBM (NYSE: IBM). IBM has sued Mr. Johnson, arguing his old employment agreement prohibits him from jumping to Dell.

A Dell spokesman told the Journal that the debt offering is "for general corporate purposes, and among the possibilities -- and certainly no commitment has been made -- are acquisitions."

However, Dell rarely sold debt prior to 2008. Since last year, the Dell spokesman said it has issued a total of $3 billion in debt.

Dell's moves come as peers in the technology industry in recent weeks began snapping up each other. Last week, Intel Corp. (Nasdaq: INTC) said it would buy Wind River Systems (Nasdaq: WIND) for about $884 million and NetApp Inc. (Nasdaq: NTAP) and EMC Corp. (NYSE: EMC) are bidding over Data Domain (Nasdaq: DDUP)

Darren Thomas, the general manager of Dell's storage business, says Dell sees storage as an "area for strategic investment." He didn't comment on specific acquisitions, but says Dell wants to "expand its portfolio" in storage-related hardware, software and services.

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