Brean Murray Has Some Notes On Dell's Purchase Of 3Par (DELL, PAR)

Brean Murray Carret & Co. has some notes on Dell DELL after the computer company bid yesterday on 3PAR PAR at $18 per share. In the research note Brean Murray Carret & Co. writes, "Dell announced its intention to acquire storage systems provider 3PAR. 3PAR has storage virtualization technology for utility (“cloud” computing) architectures; CY10 Street revenue estimates are $235 million, and we believe operating margins of ~4%. The transaction is expected to be completed before the end of CY10 and to be accretive to CY11 earnings (Dell has commented yet on magnitude.) Dell paid a bit of a premium, in our view, at EV/EBITDA of 45-50x and EV/Sales of 4.0-4.5x, we believe most likely due to the “scarcity” of quality assets available in the enterprise storage ecosystem and Dell’s desire to continue adding to its enterprise IP portfolio. Dell will report its July Q results on Thursday 8/19 after the market closes." Shares of Dell closed at $11.96 yesterday.