Dell Financial Services Buyout Could Be Boon to Dell PartnersBy Jessica Davis | Posted 2007-12-20 Email Print
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Dell said that by exercising its option to buy out CIT's 30 percent ownership, it opens the door to programs specifically tailored to channel partner needs.Dell's planned purchase of global financial services and advisory company CIT's 30 percent interest in Dell Financial Services could mean good news for members of the PC maker's nascent channel partner program.
Dell announced plans Dec. 20 to exercise its option to buy out CIT's interest in its financing arm, with an eye to simplifying the financing process for its customers.
Dell also confirmed that while "there are financing options for channel partners, we are looking at a number of programs specifically tailored to channel partner needs and made possible because of this purchase," said Colleen Ryan, a Dell spokeswoman. No details were immediately available.
Dell will also realize the full return on financing instead of having to share it with CIT.
Dell said the purchase price will be $306 million and the acquisition is not expected to have a material impact on the company's results of operations or cash flows since Dell has included the financial arm in its financial statements since 2004.
Raymond James & Associates Senior Vice President of Equity Research Brian Alexander said the deal was a finalization of an agreement that has been in place for the past few years and was not a reaction to recent gloomy economic news.
Dell Financial Services was formed in 1997 by CIT and Dell to serve as a full-service financial services provider offering customer financing solutions for Dell customers throughout the United States.
CIT's vendor finance programs for Dell customers in Canada and in more than 40 other countries throughout Europe, Asia, Latin America and the South Pacific remain in place and are not affected by today's announcement, CIT said in a statement. In addition, CIT continues to have the option to provide funding to Dell Financial Services through January 2010.