Dell Inc. (NASDAQ:DELL) isn't letting a
legal battle between its new dealmaker David Johnson and his former employer IBM Corp. (NYSE:IBM) slow its plans for an aggressive expansion. The No. 2 PC maker has previously indicated it has $9 billion in cash on hand and is looking to do deals. Now, citing people who have spoken with Dell CFO Brian Gladden, the
Wall Street Journal is reporting that Dell may pursue a "significant-sized company" this summer to expand its data storage and technology services businesses.
In May, Dell hired Johnson as its chief M&A executive, a clear signal the company was ready to ramp up its deal activity. Johnson is a veteran dealmaker who spent 27 years at IBM, the last nine leading M&A and divestitures.
For now, Johnson's ability to lead M&A at Dell has been stalled by IBM's lawsuit. IBM has sued Johnson to block his move to Dell based on a binding noncompete clause signed in 2005. Johnson is currently working in a capacity unrelated to M&A. As Sullivan & Cromwell LLP partner Theodore Rogers, who specializes in labor law,
told us previously, "Often the new employer will limit the activities of the new employee for a time to address the previous employer's concern that sensitive information might be used."
Most noncompete legal cases are ultimately settled. But with Dell apparently talking up its M&A ambitions, that could embolden IBM to keep Johnson sidelined for as long as possible. - Suzanne Stevens
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