Dell Inc plans to buy Perot Systems Corp for about $3.9 billion, paying a steep 67.5 percent premium to expand its technology services business and compete with Hewlett-Packard Co and IBM.

Perot Systems, a computer services provider founded in 1988 by former U.S. presidential candidate Ross Perot, would be the largest ever acquisition by Dell and comes after extended speculation about its M&A strategy.

Dell, which lags far behind HP and IBM in the services arena, is looking to buy a company with a strong focus on serving healthcare and federal government customers. It expects the acquisition to add to earnings in fiscal 2012, but some analysts thought the price tag may have been too high.

Dell said on Monday it would pay $30 per share for Perot Systems, whose Friday's closing price was $17.91. Goldman Sachs advised Perot Systems on the transaction. Morgan Stanley advised Dell.

J.P. Morgan analyst Mark Moskowitz said the price is 1.4 times Perot Systems' sales, compared with HP's purchase of EDS for 0.6 times sales last year. That would make the acquisition a little expensive, although it was good for Dell to lessen its dependence on personal computers, he said.

We do see the building block as being compelling, but the purchase price seems relatively rich, Moskowitz wrote in a research note.

Perot shares jumped 65 percent to close at $29.56 while Dell shares fell 4.1 percent to $16.01.

The deal comes as large technology companies expand into higher margin IT services to secure stable and recurring revenue as computer hardware becomes cheaper.

Dell is the world's No. 2 maker of PCs, with roughly 60 percent of its revenue coming from that market. The company has been trying to diversify its range of offerings, and services currently make up only around one-tenth of sales.

Kaufman Bros analyst Shaw Wu said Dell is finally taking a step to address some of its weaknesses, but it remains to be seen how much impact the deal will have as Dell's combined services offering would still be much smaller than its rivals.

This still doesn't have quite the scale to compete ... but it's also not so outrageous it will be difficult to integrate, Wu said.

The announcement marked the second time in as many years that Ross Perot-founded companies found themselves at the center of a major technology deal.

Last year, HP made its bold play in the services segment with the $13.2 billion purchase of EDS, which was founded by Ross Perot in 1962. HP is now the world's No. 1 PC maker and No. 2 IT services player, behind IBM.

The Perot family owns roughly 30 million shares of Perot Systems, or a 25 percent stake. Ross Perot Jr., Perot Systems' chairman, will be considered for appointment to the Dell board after the deal closes.

FOCUSED ON HEALTHCARE, GOVERNMENT

Perot Systems specializes in providing business processes and technology consulting services, with more than a third of its 23,000 employees based in India. It estimates that it is the largest provider of IT services to hospitals, operating in roughly 1,000 around the world. Half its sales are from the healthcare sector, and a quarter in government services.

Forrester analyst Paul Roehrig said Dell's services offering has traditionally been tied to hardware support, but the company has been trying to shift into more managed services, which the Perot deal should help facilitate.

It's a pretty solid deal. Dell needed more firepower in the services space ... they get some great customers in some attractive verticals, he said.

On a combined basis, the two companies have posted services revenue of roughly $8 billion over the past four quarters.

Dell said the deal may open the door to the sale of Dell PCs to Perot's clients, but emphasized that the main target was the expansion in IT services.

This acquisition makes great sense because of the obvious ways our businesses complement each other and enable us to grow profitably over time, Dell Chief Executive Michael Dell said.

The two companies spend a combined $4 billion in the areas they plan to integrate, and Dell hopes to achieve cost savings of about 6 percent to 8 percent, or $300 million over two years.

Dell has $12 billion in cash and short-term investments and said it continues to look at acquisitions. Earlier this year, Dell hired IBM's M&A chief, David Johnson. IBM has sued Johnson, saying he violated a non-compete agreement.

(Additional reporting by Ritsuko Ando in New York; Editing by Phil Berlowitz, Gary Hill and Steve Orlofsky)

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