SAN FRANCISCO--PC maker Dell Inc. will become a private company under a leveraged buyout deal worth about $24.4 billion, the company said Tuesday (Feb. 5).
Under the terms of the deal, Michael Dell, the company’s chairman and CEO, will acquire Dell in partnership with Silver Lake Partners, a leveraged buyout specialty firm focused on high-tech.
The deal includes an unspecified amount of cash and equity contributed by Michael Dell, cash funded by investment funds affiliated with Silver Lake, a cash investment from an investment firm owned by Michael Dell and a $2 billion loan from Microsoft. Terms of the deal also include rollover of existing debt and debt financing committed by several financial institutions. A breakout of how much Michael Dell and Silver Lake are each investing was not immediately available.
Michael Dell already owns roughly 14 percent of Dell’s common shares. He will continue to lead the company as chairman and CEO after the completion of the deal, Dell said.
Michael S. Dell
Dell stockholders will receive $13.65 in cash for each share of Dell common stock under the terms of the deal. According to Dell, the price represents a premium of 25 percent over Dell’s closing stock price on Jan. 11, the last trading day before rumors that the company would go private were first published. The price also represents a 37 percent premium over Dell’s average closing price during the 90 days prior to Jan. 11, Dell said.
Dell’s stock price closed at $13.27 Monday.
Dell, founded in the mid-1980s, has in recent years battled rival Hewlett-Packard Co. for leadership in global PC sales.But in the fourth quarter of 2012, Dell trailed both HP and China’s Lenovo Group Ltd. with a PC market share of about 10 percent, according to Gartner Inc. Both HP and deal are facing increased competition from the likes of Lenovo, Acer and other OEMs based in Asia.