Dell sells software unit to Francisco Partners and Elliott Management for undisclosed sum
TechCrunch has confirmed that Francisco Partners and Elliott Management have agreed to acquire Dell's software division. — Elliott Management and Francisco Partners issued a joint press release confirming the acquisition this morning.
Context & Ripple Effects
Dell has been liquidating software assets since it committed to the $60B EMC acquisition: sources reported in December 2015 that it was shopping Perot Systems for more than $5B to raise cash, and this sale of the software division to Francisco Partners and Elliott Management lands months before the EMC deal closes.
The buyers are not one-off bidders — Francisco Partners reappears in Dell's orbit five years later to buy Boomi with TPG at $4B, and the broader arc runs through the RSA sale to Symphony Technology Group in 2020 and the VMware spinoff in 2021. Today's deal is the first move in what becomes a systematic carve-out program.
First-order effects
- Dell exits its software division outright for an undisclosed sum, converting a non-core unit into cash during the most debt-heavy stretch of the EMC financing.
- Francisco Partners and Elliott Management add a second enterprise-software carve-out to their joint pipeline, on top of Francisco Partners' parallel activity buying Moneris from Royal Bank of Canada and Bank of Montreal.
Second-order effects
- Private equity firms with freshly raised dedicated funds — Francisco Partners later closes a $21B vehicle above target — become the standing bid for software units that hardware consolidators no longer want to carry.
- Dell's remaining software properties, RSA and Boomi among them, sit under the same divestiture logic once EMC integration begins, giving future buyers a proven template for pricing these carve-outs.
Third-order effects
- If the pattern holds through the RSA and Boomi sales and the VMware spinoff, Dell ends up structurally refocused on hardware and infrastructure while its former software assets are run as standalone PE-owned companies rather than divisions of a conglomerate.
- Mega-acquisitions in tech increasingly get financed by pre-selling non-core software to financial sponsors, shifting ownership of mid-market enterprise software from strategic acquirers to buyout firms over time.
The trend: Leveraged mega-deals are being funded by carving out non-core software to private equity, progressively converting diversified acquirers like Dell into focused hardware and infrastructure companies.