The leveraged buyout of Dell would reportedly be the largest such deal since the global financial crisis that began in 2008. Leveraged buyout deals were in vogue in high tech in the middle of the last decade, when chip vendors Freescale Semiconductor and NXP Semiconductors were each taken private. Those deals saddled the companies with debt that they are still struggling with today.
Silver Lake was involved in the NXP buyout deal, which was worth about $8 billion.
"I believe this transaction will open an exciting new chapter for Dell, our customers and team members," said Michael Dell. "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."
Michael Dell said the company has made solid progress executing on its strategy over the past four years, but said the realization of the company’s strategy will take more time, investment and patience. "I believe our efforts will be better supported by partnering with Silver Lake in our shared vision," Michael Dell said. "I am committed to this journey and I have put a substantial amount of my own capital at risk together with Silver Lake."
Dell said its board of directors agreed on the recommendation of a special committee of independent directors, which the company said unanimously approved the deal. Michael Dell, the company’s founder and chairman of its board of directors, recused himself from all board discussions over the deal, according to Dell.
Closing of the deal is subject to a number of conditions, including a stockholder vote, Dell said. Michael Dell first approached the board of directors about the deal last August, Dell said.