Storage accounts for about $2.4 billion of Dell's annual revenue and is its fastest-growing business, he said. With this acquisition, "Dell has a position in the future technology for the storage industry," the CEO told Reuters in an interview.
The company said it expects the acquisition to reduce its earnings per share by 2 cents to 5 cents in aggregate for the fiscal years 2009 and 2010.
Shares of Dell slipped 23 cents, or 0.8 percent, to $29.82 in morning trade on Nasdaq.
Analyst Shannon Cross of Cross Research said the deal proves that Dell is using available cash to buy differentiated intellectual property rather than for stock repurchases, which might more quickly benefit shareholders.
"Shareholders are worried that Dell is buying things and not stock (and) concerned there may be more coming that is dilutive," said Cross. "However, acquisitions position Dell for the future."
When asked if this deal signals Dell's intention to aggressively pursue big targets, Michael Dell said: "In the last two years we've made six acquisitions. The pace has increased in relatively recent history here. All these acquisitions fit into the key themes we've outlined around growth."
The acquisition has been approved by the boards of both companies but still must pass regulatory muster. It is expected to close late in the fourth quarter of Dell's fiscal year 2008 or early in the first quarter of its fiscal 2009.