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.
It's always seemed to me that there are so many advantages to being a private company. Fewer regulatory requirements and you don't need to make quarterly results your sole focus. You can think long term.
It is interesting to watch these companies come and go. I'm not sure if Dell can ever get back to where they were. If I were Michael Dell, I don't think I would do that. But then, I guess that's why I'm not a billionaire.
Why go public? The very rich and the hedge funds control so much cash now, why bother with the rubes, and all the public and legal scrutiny it brings. The only reason anyone goes public any more is so that the insiders can cash out. By the time us schmucks can buy, the money has already been made.
A similar move seemed to work for Seagate.
Despite Dell's acquisitions in networking, it seems it is still behind the curve in the post PC era. This move will give the once-retired Dell the breathing room to reshape his company into something that might survive the shifts.
January 2016 Cartoon Caption ContestBob's punishment for missing his deadline was to be tied to his chair tantalizingly close to a disconnected cable, with one hand superglued to his desk and another to his chin, while the pages from his wall calendar were slowly torn away.122 comments