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Dell Becomes Private for $24.4 billion

|Feb 5|magazine6 min read

Dell Inc. Announced today its entrance into a definitive merger agreement in which Michael Dell, Founder, Chairman and CEO of Dell, paired with Silver Lake will acquire Dell.

Dell stockholders will receive $13.65 in cash per share of Dell common stock, which totals approximately $24.4 billion. This price was selected at a “premium of 25 percent over Dell’s closing share price of $10.88 on Jan 11, 2013,” and is a 37 percent premium over Dell’s average closing price over the previous 90 days prior to January 11th.  

“I believe this transaction will open an exciting new chapter for Dell, our customers and team members. We can deliver immediate value to stockholders, while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise. Dell has made solid progress executing this strategy over the past four years, but we recognize that it will still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision. I am committed to this journey and I have put a substantial amount of my own capital at risk together with Silver Lake, a world-class investor with an outstanding reputation. We are committed to delivering an unmatched customer experience and excited to pursue the path ahead.”

After the transaction is completed, Michael Dell will continue as Chairman and CEO and maintain a significant equity investment in Dell through contribution of shares, in which he owns approximately 14 percent, to the company as well as a substantial cash investment.

The transaction is to be financed through cash and equity provided by Mr. Dell, cash from Silver Lake, a cash investment from MSDC Management, L.P, a $2 billion loan from Microsoft and debt financing through Bank of America, Barclays, Credit Suisse and RBC Capital Markets.

"Michael Dell is a true visionary and one of the preeminent leaders of the global technology industry," said Egon Durban, a Silver Lake Managing Partner. "Silver Lake is looking forward to partnering with him, the talented management team at Dell and the investor group to innovate, invest in long-term growth initiatives and accelerate the company's transformation strategy to become an integrated and diversified global IT solutions provider."

The transaction is subject to regulatory approvals and is expected to close before end of Dell’s second quarter 2014.