Dell Going Private in Multibillion Deal
In a press release February 5, Dell founder and CEO Michael Dell confirmed that Dell will be going private in a $24.4 billion dollar deal.
Michael Dell is teaming up with Silver Lake Partners investors to purchase the company’s common shares. Additional funding was provided by Microsoft in the form of a $2 billion dollar loan.
This deal, first reported by Bloomberg Business Week on January 12th, responds to the difficult business environment and need for flexibly that Dell is facing. The change in company ownership is expected to give Dell the turnaround time it needs to succeed, without the demands and pressures of stockholders.
Michael Dell expressed his belief that going private would allow Dell to better succeed in his press statement this morning:
“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.”
Stock prices soared after the deal was initially announced. In the final deal Dell stock was purchased at $13.36 per share. This represents a 25 percent premium over the closing stock price of $10.33 on January 11th.
At CyberStreams, we have been a partner with SonicWALL for over 10 years, and a Dell partner for almost as many. We are excited to hear about Dell’s decision to go private and hope that this means the company will be better able to remain nimble and meet the needs of small businesses. From the handling of the recent SonicWALL acquisition, we can see that Dell is increasingly becoming SMB channel focused.