El Dorado, Crescendo Win With Compellent Sale to Dell

Dell, this morning, finally got its consolation prize.

On Monday, Dell reached a deal to buy Compellent, a data storage provider, for about $820 million, or $27.75 a share. The deal, announced last week, is expected to close in early 2011.

The world’s third-largest personal computer maker is expected to use the acquisition to expand its data center offering. Compellent will give Dell technology that helps customers store, recover and manage large amounts of data, according to Bloomberg.

In September, Dell lost out in a heated bidding war for 3Par, which ultimately went to Hewlett-Packard for $2.35 billion. Since then, Compellent had been viewed as a likely target for Dell and its shares had experienced a run-up, which led to the current below-market offer, the Wall Street Journal said.

Compellent’s sale to Dell represents a win for two VC firms, El Dorado Ventures and Crescendo Ventures. El Dorado owns about 2.2 million shares, or 6.9% of Compellent, while Crescendo Ventures owns about 3.2 million shares, or 10%, according to an April proxy filing. At $27.75 a share, El Dorado stands to realize about $61 million, while Crescendo could earn $88 million.

Crescendo and El Dorado’s investment dates back to 2002 when Compellent announced it received $9 million in funding. Crescendo and El Dorado were the investors in that first round. The following year Compellent secured $14 million in additional funds led by Cargill Ventures. El Dorado and Crescendo also invested.

Crescendo owns about 10% of Compellent, confirmed David Spreng, the firm’s managing general partner. El Dorado continues to hold a “significant” position in Compellent, wrote Charles Beeler, a general partner, in an email .

“We are happy with the outcome and think the Dell-Compellent combination is a great fit,” Beeler said.

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