Dell Inc. (NASDAQ: DELL), which has been arguably pummeled in recent years by larger competitor Hewlett-Packard Corporation (NYSE: HPQ), is moving right along every quarter but definitely is not growing like HP is. The Round Rock, TX-based computer behemoth doesn't have the product and services portfolio HP has, and although it has launched into retailers in the last 18 months to great applause, it hasn't been enough. Dell is simply another brand of PC on the retail shelf. There is very little to no value proposition there. What to do?Well, do what other manufacturers do when growth is a challenge: buy it. CEO and co-founder Michael Dell wants to buy a "significant-sized company" sometime this summer or fall. This comes as Dell, which has traditionally shunned acquisitions but has ramped up the activity in the last two years, needs something to bring it to more relevance in this business and corporate environment.
It's issued about $3 billion in debt since 2008, as it builds towards acquiring... something. It's clear Dell sees growth here (as opposed to organic growth), and its competitors are getting their hands on acquisitions at cheap recession prices as well. It's not too late, but Dell -- once the largest computer maker in the world -- is losing lucrative profit to HP and International Business Machines Corp. (NYSE: IBM), both of which have expanded in the services sector and have turned up the heat for Dell. Add to that Dell's inexperience with acquisitions and the road gets even tougher as it contemplates its acquisition actions.
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