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Dell Goes Private In $24.4 Billion Deal

Dell Inc., today announced that it has signed a definitive merger agreement in which the company will be acquired by Michael Dell, Founder, Chairman and CEO of the company, and Silver Lake, a global technology investment firm. The deal is valued at approximately $24.4 billion, with each stockholder receiving $13.65 per share, according to a company press release. The transaction is expected to close before the end of Dell’s Q2 2014.

When the transaction is complete, Michael Dell, who owns about 14% of Dell common shares, will continue to lead the company in his current roles. Moreover, he will maintain a significant equity investment in Dell by contributing his shares of Dell to the new company, as well as making additional cash investments.

“I believe this transaction will open an exciting new chapter for Dell, our customers and team members,” Dell said. “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.”

The transaction also will be financed through cash provided by investment funds affiliated with Silver Lake, a contribution by an investment fund affiliated with MSDC Management, L.P., a $2 billion loan from Microsoft, rollover of existing debt, as well as debt financing that has been committed by BofA Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets, and cash on hand.

Regarding the company’s investment and Dell’s privatization, Microsoft released the following statement: “Microsoft has provided a $2 billion loan to the group that has proposed to take Dell private. Microsoft is committed to the long-term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future. We’re in an industry that is constantly evolving. As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform.” 

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