Acquisitions (Notes)

6 Months Ended

Aug. 03, 2012

Business Combinations [Abstract]

Acquisitions

NOTE 8 — ACQUISITIONS

During the six months ended August 3, 2012, Dell completed its acquisitions of AppAssure Software, Inc., Clerity Solutions, Inc., SonicWALL Inc. (“SonicWALL”), Wyse Technology, Inc. ("Wyse Technology"), and Make Technologies Inc. The total purchase consideration was approximately $2.4 billion in cash for all of the outstanding shares of all of the acquisitions completed during the period, which primarily consisted of SonicWALL and Wyse Technology. SonicWALL is a global technology company that offers advanced network security and data protection software solutions. Wyse Technology is a global provider of client computing solutions designed to extend desktop virtualization offerings. All of the acquisitions will be integrated into Dell's Commercial segments.

The following table summarizes the fair value of the assets acquired and liabilities assumed by major class for all the acquisitions completed during the period:

	Estimated Cost			Weighted-Average Useful Life
	(in millions)			(in years)
Intangible Assets:
Amortizable intangible assets:
Customer relationships	$	374		5.3
Technology	561			5.2
Non-compete agreements	5			4.0
Trade names	46			7.3
Total amortizable intangible assets	986			5.3
In-process research and development	31
Total intangible assets	1,017
Goodwill	1,734
Deferred tax liability, net	(323		)
Other assets acquired and liabilities assumed, net	(7		)
Total	$	2,421

Dell has recorded these transactions using the acquisition method of accounting and recorded their respective assets and liabilities at fair value at the date of acquisition. The excess of the purchase prices over the estimated fair values was recorded as goodwill. Any changes in the estimated fair values of the net assets recorded for these acquisitions prior to the finalization of more detailed analyses, but not to exceed one year from the date of acquisition, will change the amount of the purchase price allocable to goodwill. Any subsequent changes to any purchase price allocations that are material to Dell's consolidated financial results will be adjusted retroactively. 

Dell's preliminary estimate for goodwill acquired during the six months ended August 3, 2012, was $1.7 billion. This amount primarily represents synergies associated with combining these companies with Dell to provide Dell's customers with a broader range of IT solutions. This goodwill is not deductible for tax purposes. In conjunction with these acquisitions, Dell will incur approximately $154 million in compensation-related retention expenses that will be expensed over a period of up to four years. There was no contingent consideration related to these acquisitions. Dell has not presented pro forma results of operations for the foregoing acquisitions because they are not material to Dell's Condensed Consolidated Financial Statements on either an individual or an aggregate basis.

Additionally, during the second quarter of Fiscal 2013, Dell announced that it entered into a definitive agreement to purchase Quest Software Inc., a global provider of IT management software. Under terms of the agreement, Dell will pay $28.00 per share in cash for each share of Quest for an aggregate purchase price of approximately $2.4 billion, net of Quest’s cash and debt. The transaction is expected to close in the third quarter of Fiscal 2013, subject to approval by Quest's shareholders and other customary closing conditions.