April 2 (Bloomberg) -- Dell Inc., the world’s third-largest maker of personal computers, paid about $1 billion to buy closely held Wyse Technology Inc., according to a person with knowledge of the matter.
Purchasing Wyse, which makes desktop devices for cloud computing, will boost earnings in the second half of fiscal 2013, Dell said today in a statement, which didn’t disclose terms of the deal. David Frink, a spokesman for Round Rock, Texas-based Dell, declined to comment, as did Wyse’s Tim Smith.
Wyse sells so-called thin drives, which connect personal computers to remote servers storing corporate data, as well as security software and services. The San Jose, California-based company has shipped more than 20 million devices worldwide, according to the statement today.
“A deal for Wyse makes strategic sense for Dell as a way to leverage its massive installed base of PCs,” Brian Marshall, an analyst with ISI Group in San Francisco, said in a note to investors. He has a neutral rating on the shares.
Dell has been using acquisitions to diversify its operations and sell more equipment and software for corporate data centers. Meanwhile, it’s cutting back on its less profitable line of consumer products. The company hired CA Inc. Chief Executive Officer John Swainson to oversee the push in February.
Dell was advised by Dewey LeBoeuf LLP, while Wyse received legal guidance from Gibson Dunn & Crutcher LLP.
Dell’s shares rose 1.1 percent to $16.77 at the close in New York. The stock has gained 17 percent in the past 12 months.
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