Dell Technologies has agreed to sell its Boomi cloud business to private-equity firms Francisco Partners and TPG in a cash deal valued at $4 billion, as part of efforts by CEO Michael Dell to trim down the computer manufacturer.
The deal is expected to close by the end of this year, the companies said in a statement Sunday without providing additional details of the terms. Dow Jones had earlier reported that the companies were near a deal.
Chesterbrook-based Boomi specializes in integrating cloud platforms for companies and has more than 15,000 customers.
Boomi was a 30-person start-up, started by engineer Rick Nucci and run then by serial entrepreneur Bob Moul when Dell bought it a decade ago for an undisclosed amount.
Many businesses have dozens of applications that don’t talk to each other. Boomi links up those services. It also has developed a trove of information on how workers, bosses, customers and contractors interact remotely. It now uses that information to predict clients’ needs and workers’ and customers’ behavior. The coronavirus shutdowns accelerated its usefulness.
Boomi’s CEO Chris McNabb predicted the sale would foster more growth. “By partnering with two tier-one investment firms like Francisco Partners and TPG, we can accelerate our ability for our customers to use data to drive competitive advantage. In this next phase of growth, Boomi will be in a position of strength to further advance our innovation and market trajectory while delivering even more value to our customers,” McNabb said in a statement.
Meanwhile at Dell “we’re focused on fueling growth by continuing to modernize our core infrastructure and PC businesses and expanding in high-priority areas,” Jeff Clarke, vice chairman and chief operating officer of Dell, said in a statement.
Dell has been cleaning up its balance sheet in recent years and selling off a variety of businesses. The company announced plans last month to spin off its stake in infrastructure software provider VMware, its most valuable asset. Last year, it sold cybersecurity unit RSA for $2.08 billion to a private equity firm.
The company is trying to reduce its dependence on hardware sales and transform into a seller of subscription-based computer services. While that shift is ongoing, the company still gets about half its revenue from sales of personal computers to commercial and consumer customers.
Dell shares closed Monday at $97.78, down 59 cents or 0.60%.