Dell has announced that it has entered into a definitive agreement to acquire EqualLogic, a leading provider of high-performance iSCSI storage area network (SAN) solutions uniquely optimized for virtualisation.

Dell sells the acquisition will strengthen its product and channel leadership in simplifying and virtualising IT for customers globally. iSCSI SAN technology apparently represents the fastest growing part of the storage business.

"Our customers will be dealing with the largest increase in data we have seen in our history over the next few years", said Michael Dell, Chairman and CEO, Dell.

"Leading the iSCSI revolution will help Dell accelerate IT simplification and virtualization and will drive the Dell value proposition into more areas of the enterprise storage business."

Under the terms of the agreement, Dell will purchase EqualLogic for approximately $1.4 billion in cash. The acquisition of EqualLogic is expected to close late in the fourth quarter of Dell's fiscal year 2008 or early in the first quarter of fiscal 2009.

After the transaction, Dell plans to produce future EqualLogic-branded products, and also plans to incorporate EqualLogic technology into future generations of its Dell PowerVault storage line.