DealZone

Not content with buying Perot Systems last autumn for US$3.9bn followed shortly thereafter with the purchase of Kace Networks, Dell has a potential US$11bn war-chest to make further acquisitions.

“You will see acquisitions from us,” Dell’s Steve Felice told Reuters’ journalist Christoph Steitz on Tuesday. Felice is president of the company’s consumer, small and medium business, which makes up almost half of all Dell’s sales.

“[These acquisitions will] be pointed towards the strategy that we have as a company; and one of those key strategies is increasing the solutions, so that we can be the best-value solution provider to customers,” he added.

While Dell may be targeting the security and systems management space as a top priority to beef up its services business geared toward sectors such as government and healthcare, Felice’s comments bring up once again the whole mooted idea of Dell buying PDA maker, Palm.

Indeed, US$11bn worth of cash is a lot of money to play around with, particularly for SVP and M&A guru Dave Johnson, whom Dell controversially poached from IBM last year after he had spent 27 years at Big Blue.

After Dell went to its $10 billion treasure chest to buy up Perot Systems for $3.9 billion, you might have expected investors to be a little more excited about Xerox’s bid for ACS. After all, business services helps Xerox get away from nuts and bolts copiers, much the way Perot was seen helping Dell move away from building computer boxes. And ACS is seen giving Xerox more chips to play against HP, which bought Electronic Data Systems a little over a year ago.

The Xerox bid, unveiled at $6.6 billion, includes 4.935 Xerox shares and $18.60 in cash for each share of ACS. That totaled $63.11 per share based on Friday’s closing prices, but with Xerox shares having lost more than 15 percent in the opening minutes today, the value is now down to a little over $55 per share. Has the office copy machine behemoth misjudged the market? Dell’s stock lost only about 6 percent following the Perot announcement.

Perhaps the issue was more one of timing than anything else. Monday is the Yom Kippur Jewish day of atonement. Speaking with analysts, Xerox CEO Ursula Burns apologized “for our need to do this announcement on Yom Kippur” “It certainly was not our intention.” they wanted to do it before it leaked, she said. The company may have a lot more than bad timing to atone for if investors don’t get behind the deal.

If you want to take a bite out of Apple’s piece of the staggeringly huge (but difficult to quantify in $$$ terms) smartphone market pie, you’d better either have the magical new “thing” or be willing to spend to buy it.

As Anupreeta Das reports, Palm – one of the stalwart originals in the mobile handset space — has remade itself into a terrific target with the success of its Pre. Palm’s stock got a jolt this week on talk that Nokia could be considering a bid. But as she explains, Palm may prove to be too pricey a purchase, even for those with deep pockets.

Since introducing the Pre, Dell, Microsoft, Nokia and Motorola have been mentioned as possible suitors. If one of these cash-rich companies was to bid for Palm today, it would be targeting a stock that has quadrupled this year. Complicating matters, “details on how many units it has sold are skimpy, making it difficult to value the success of Palm’s turnaround story,” she reports.

With something like $10 billion in cash, Dell wouldn’t seem to be stretching itself to buy Perot Systems. But the $3.9 billion it is offering represents a 67 percent premium, so Dell shareholders should probably ask themselves whether Perot’s business is worth so much.

Perot is a business service company with a big component dedicated to health information. It was founded in 1988 by Ross Perot — the same Ross Perot who ran for U.S. president as an independent in 1992 and 1996.

Dell’s cash pile is burning a hole in its pocket. It has said it wants to step up acquisitions, and services businesses are a logical target area, with higher margins and steadier revenue than the business of building and selling computers that made Michael Dell (pictured in shades above) the tech mogul he is today.