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Dell Just Got a Little Closer to Paying Down Its Ginormous Debt

Key Speakers At The 2015 Dell World ConferenceKey Speakers At The 2015 Dell World Conference
Michael Dell at Dell World 2015.Photgraph by Matthew Busch — Bloomberg via Getty Images

It’s been on the block for a while, but it’s now official: Dell’s software group is being sold to a pair of private equity firms, Francisco Partners and Elliott Management, according to a statement on Monday. Terms were not disclosed, but unnamed sources speaking to Reuters pegged it at about $2 billion.

The sale covers Quest Software’s IT management products and the SonicWall security business, but not Boomi, Dell’s cloud integration business. Dell bought SonicWall, a security software company for $1.2 billion in 2012, and Quest, with its IT management tools a few months later for $2.4 billion.

A Dell spokesman said the deal should close sometime between August of this year and January 2017.

As noted, this news is not surprising. Rumors of Dell shopping these products to private equity firms have been circulating for months as the beleaguered tech giant works to pay down debt incurred by its $67 billion buyout of EMC (EMC).

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Since announcing its plan to buy EMC (and EMC’s VMware (VMW) unit, along with other IT properties), Dell has been divesting itself of other properties. In March, Dell sold its Perot Systems technology services arm to NTT Data.

EMC shareholders will vote on the Dell offer July 19.

For more, read: Here’s What’s Still Bugs Some People About the EMC-Dell Deal

Dipanjan “DJ” Deb, chief executive of Francisco Partners, a private equity firm, boasted in a statement that Quest and SonicWall together claim more than 180,000 customers. In the past, Elliott Management, known as an activist investment firm, has been quite vocal in its position that EMC needed to shake up its management and business structure. Based on this financial deal, it appears Dell has addressed that.

For more on Dell-EMC deal watch:

Elliott’s new Evergreen Coast Capital affiliate was also involved in this deal, Jesse Cohn, Elliott’s senior portfolio manager said in a statement.

This story was updated with Dell comments.