Dell’s Acquisition of Wyse Looks Strange (DELL)

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Dell Inc. (NASDAQ: DELL) announced this morning that it would acquire privately held Wyse Technology for an undisclosed sum and that it expects the deal to close in the second half of its 2013 fiscal year. Wyse makes and sells hardware and cloud-based software.

The odd thing about this acquisition is that what Dell is really buying are Wyse’s customers. Wyse, which has been making dumb terminals (now called “thin” clients) since the 1980s, added cloud-based software to its offerings a few years ago and has built up a market in the healthcare business.

What will Dell do with Wyse? One possibility is that Dell will try to move Wyse customers to Dell hardware, citing more flexibility and power. Another is that it will try to sell more servers and networking and storage devices to attach to the Wyse infrastructure that companies already have. Or maybe it will offer Wyse customers a choice.

There may be a silver lining in this deal, but out of the chute, it is rather strange. Dell’s shares are up about 1.25% today at $16.80 in a 52-week range of $13.29-$18.36.

Paul Ausick