Dell to Acquire Leading SaaS E-Mail Continuity, Compliance and Archiving Company MessageOne

Dell has signed a definitive agreement to acquire MessageOne, Inc., an industry leader in Software-as-a-Service (SaaS) enabled enterprise-class e-mail business continuity, compliance, archiving and disaster recovery services. The acquisition, for approximately $155 million in cash, has been approved by the board of directors of each company and is subject to regulatory approvals and customary closing conditions.

• Critical Building Block to Dell’s Growing Portfolio of Enterprise-Class Configurable SaaS Services
• Simplifies and Helps Ensure Continuity for Most Widely Used Application – E-mail

MessageOne’s suite of services helps eliminate the downtime and complexity associated with managing, archiving, e-discovery, and long-term storage of e-mail.

“This is a valuable acquisition for Dell. MessageOne’s offerings add key capabilities to our growing SaaS-enabled services portfolio for the most critical application to businesses of any size – e-mail,” said Steve Schuckenbrock, president, Dell Global Services, and chief information officer. “MessageOne’s services not only meet the needs of large companies – with an impressive roster of existing Fortune-500 customers and marquee partners as proof points – but can also scale down cost effectively to meet the needs of small and medium business customers.”

A leader in the industry, MessageOne brings to Dell world-class technology and talent that will broaden Dell’s configurable services offerings. The company plans to make MessageOne offerings available after close to both direct customers and channel partners.
Dell’s services strategy is focused on providing customers and partners a configurable SaaS suite of mission-critical capabilities that span primary business functions such as e-mail. MessageOne’s e-mail business continuity and compliance offerings complement recent Dell SaaS acquisitions and expand on the company’s ProSupport offerings of configurable services announced last week.

Acquisition Background

The acquisition of MessageOne is a valuable addition to Dell’s SaaS suite, and in line with its business strategy.

The Dell Board of Directors took a number of additional steps as part of the acquisition process because the transaction involves related parties. MessageOne was co-founded by Adam Dell, Michael Dell’s brother, and is owned in part by two investment funds, Impact Venture Partners and Impact Entrepreneurs Fund, managed by Adam Dell. Michael Dell, Susan Dell, a trust for the Dell’s minor children, and Mr. Dell’s parents are also investors in the Impact funds. Adam Dell also serves as MessageOne’s non-executive chairman of the board.

“We recognized as we began considering a potential acquisition of MessageOne that related-party interests existed and that this required a series of measures designed to ensure that the transaction was considered, analyzed, negotiated and approved objectively and independently,” said Don Carty, Dell CFO and vice chairman. “The process that our Board of Directors put in place provided the high degree of independence and diligence required in this circumstance,” said Mr. Carty.

To ensure objectivity and transparency:

• Michael Dell was excluded from negotiating acquisition terms and from all aspects of the decision-making process.
• The independent members of Dell’s board of directors (excluding Michael Dell and Don Carty) explored and analyzed in detail the process by which management identified, proposed, analyzed and negotiated the acquisition to ensure that management was acting independently and in the best interests of Dell Inc. and its shareholders.
• The Dell board received an opinion from Morgan Stanley & Co. Incorporated to the effect that, as of Feb. 11, 2008 and based upon and subject to the matters stated in its opinion, the consideration to be paid by Dell pursuant to the merger agreement was fair, from a financial point of view, to Dell Inc.

Following this process and after consideration of the relationships and the interests of Michael Dell, Adam Dell and members of the Dell family, the independent members of the Dell board concluded that the transaction was fair to, and in the best interests of, Dell Inc. and its shareholders and approved the transaction.

It is currently expected that, when the Impact funds distribute the acquisition consideration to their partners, Adam Dell will receive approximately $970,000; Michael Dell, Susan Dell and their children’s trust, collectively, will receive approximately $12 million; and Mr. Dell’s parents will receive approximately $450,000.

Michael and Susan Dell have indicated that the proceeds that they and their children’s trust receive from the acquisition will be donated to charity.