Thursday, July 22, 2010

EMC Seeking Acquisitions with $10.8 Billion Cash

The company who bought my previous firm, Document Sciences, EMC CEO Joseph Tucci said yesterday that the information technology infrastructure provider will look for “a string of pearls” – smaller acquisitions in 2010 probably no larger than USD 400m - as it considers buys in the year ahead.

Tucci, noting that the company has a sizeable potential acquisition base, with plenty of cash, said what he considers small may seem larger from other perspectives.

"I’ve always said I favor a 'string of pearls' as opposed to a massive acquisition,” Tucci told investors and analysts during the company’s second quarter earnings call, responding to a question on the size of potential targets.

“I think from a revenue standpoint, the highest – biggest company we bought had USD 400 million in revenue or something thereabouts,” he said. “So when you talk on a base of USD 16.5bn plus, certainly that’s not – I don’t call that big. Okay? But obviously in dollar value, I would say you’re correct. That would be a trend that you should think we’re going to continue. It’s worked really well, and it’s what I like."

David Goulden, company CFO, said the company has USD 10.8bn in cash, and spent USD 341m buying back company stock in the second quarter, bringing the number to USD 500bn for the year; it will likely spend another USD 1bn in stock buybacks by year end, he noted.

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