The companies didn't disclose how much Dell agreed to pay, but people familiar with the matter valued the deal around $1.2 billion. One of these people said that the price tag included SonicWall's debt.

In 2010, private-equity firm Thoma Bravo LLC led a group that took SonicWall private in a deal valued at $717 million. The buyout firm Tuesday noted that SonicWall's value has significantly increased since that time.

SonicWall makes devices and associated software such as firewalls that protect corporate networks from cyberattacks. Dell said that it would sell SonicWall's tools to large and small businesses and that it would add the technology to some of its other products.

The acquisition of SonicWall is the latest in a string of purchases made by the Round Rock, Texas-based computer giant in its efforts to expand beyond its roots in personal computers and server systems. It is also the second deal made by the company's new software division. That group, led by John Swainson, the former chief executive of CA Inc., was formed last month.

Mr. Swainson said on a conference call Tuesday that the tech-security field is "fast-growing and highly profitable" and SonicWall provides Dell with "unique intellectual-property resources and technology."

That thinking puts SonicWall in line with other recent Dell deals, and reinforces Chief Executive Michael Dell's transformation plan for the company. In a recent interview, Mr. Dell said that his company's ongoing strategy has been to buy companies aimed at businesses that expand Dell's product lineup, while also expanding its potential profit.

"Our acquisitions tend to have much higher margins than the PC parts of the business," Mr. Dell said.

Mr. Dell, who said he no longer views Dell as merely a PC maker, added in the interview that he had a preference for small and midsize deals.

The SonicWall purchase is expected to close in about 45 days, putting the transaction within Dell's fiscal second quarter. Its fiscal first-quarter ends next month. Dell expects the transaction to be accretive to adjusted earnings in the second half of this fiscal year. Dell said SonicWall had revenue of about $260 million in the trailing 12-month period.

ISI Group analyst Brian Marshall noted that with Dell logging roughly $65 billion in annual sales, acquisitions of this type will take a long time to appreciably increase the company's overall sales and profit.

Still, Mr. Marshall called moves like the SonicWall buy a step in the right direction.

In its most recent quarterly results reported in February, Dell's shift to more profitable products was overshadowed by a shortage of disk drives that hurt its ability to sell higher-end computers. Quarterly net income fell 18%, and Dell issued a downbeat forecast for its current quarter.

SonicWall holds 139 registered and pending patents, and has more than 300,000 customers and about 950 employees. Its security products include firewalls, secure remote access, email protection, and backup and recovery. Dell shares were up 1.6% to $17.23 in 4 p.m. trading on the Nasdaq. The stock has risen 17% so far this year.

Centerview Partners and law firm Kirkland & Ellis advised Thoma Bravo and law firm Dewey & LeBoeuf advised Dell.

By: DocMemory
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