It's official: Dell going private in $24 billion deal

By on February 5, 2013, 10:00 AM

Dell has officially confirmed what’s been rumored for the last few weeks by announcing plans to go off the publicly-traded stock market and into private hands. According to a press release issued moments ago, the transaction will be financed through a combination of cash and equity from founder Michael Dell, funds from investment firms Silver Lake and Michael Dell’s MSD Capital, a $2 billion loan from Microsoft, plus debt financing from a number of banks. All in all the deal is valued at approximately $24.4 billion.

Dell's shareholders will receive $13.65 for each share of common stock they hold in the company, up about 25 percent from Dell's closing share price of $10.88 back on January 11th when rumors of a buyout began to circulate. Under the terms of the deal, there will be a 45-day “go shop” period during which the firm will be open to other offers before closing the deal.

Like many others in the industry, Dell has fallen on hard times as of late due to declining interest in traditional computers. The company has been trying to transform itself from what was once the world’s top PC maker into a business known more for a diverse portfolio of enterprise IT hardware, software and services -- not unlike HP and IBM before that. But if Microsoft’s investment is any indication, Dell is unlikely to exit or lower its focus on the consumer PC space any time soon, and will remain a key partner for Windows 8 devices.

Here’s Microsoft’s short statement regarding their $2 billion loan:

Microsoft has provided a $2 billion loan to the group that has proposed to take Dell private. Microsoft is committed to the long term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future. We're in an industry that is constantly evolving. As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform.

If everything goes through as planned Michael Dell will continue to lead the company as Chairman and CEO, his company just won't have to deal with the scrutiny from shareholders as he attempts to turn things around.




User Comments: 6

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Rippleman Rippleman said:

I wonder if once everything gets turned around for them if they will go public again. I think it will happen that way.

VitalyT VitalyT said:

I only care how this is going to affect their release road-map. I am for one desperately anticipating the February-planned announcement of their new flagman monitor - DELL U3014. It is expected to be the best monitor on the market, according to all the incoming specs:

LED, back-lit, 4 USB3-s hub, low-energy, better pivoting. Arrhhh...

Littleczr Littleczr said:

I only care how this is going to affect their release road-map. I am for one desperately anticipating the February-planned announcement of their new flagman monitor - DELL U3014. It is expected to be the best monitor on the market, according to all the incoming specs:

LED, back-lit, 4 USB3-s hub, low-energy, better pivoting. Arrhhh...

Same here. I wonder if the price of the u2711 will drop.?

Staff
Rick Rick, TechSpot Staff, said:

Good for Dell.

The only people who *should* matter are the customers -- millions of nameless, tenuously connected investors who suffer from a collective absence of tech industry expertise and imagination haven't been doing Dell any favors.

I hope Dell can cut loose and cater to its customers again... let the customers decide if its ideas are failures or successes. At the very least Dell will be better able to sell off its extraneous properties and take more risks. Provided it makes sound decisions, I can only see good happening here.

amstech amstech, TechSpot Enthusiast, said:

After reading the comments I don't think people realize DELL have been planning this for quite some time. They have been making moves in enterprise/industrial computing and infrastructure for years, and letting off the gas on commercial business.

They are headed where the money is, large scale server and business solutions.

VitalyT VitalyT said:

Really? That would imply their prominent presence in the cloud sector these days, which is by far not the case, as far as I know Any other large-scale server direction is becoming less relevant. Or, could this be one of the reasons for the sale?

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