Dell Officially Going Private in $24 Billion Buyout

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Dell has officially announced that it will be going private, confirming earlier reports. $24.4 billion is the magic number for the buyout, with Microsoft also confirming previous rumors by contributing $2 billion to the effort.


The agreement is being headed by Dell CEO Michael Dell and tech investment firm Silver Lake, and takes the longtime PC maker out of the publicly-traded stock market. Dell originally looked to go private in August, in an effort to revive its declining financials in a stagnating PC market. The agreement was reportedly finalized with the Dell board of directors last night. Dell will remain CEO of the company after the merger.

In a statement, Michael Dell said: \”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.\”

\"DellThe move would presumably give Dell the freedom to de-emphasize parts of its traditional PC business, instead allowing the CEO to set new long-term goals without worrying about the usual pressures from shareholders, quarterly reports and the rest of the public market. It could also mean a greater emphasis on tablets and other touchscreen devices, which have been steadily cutting into PC sales over the past couple of years, but it\’s still too early to tell.

What makes all of this a bit more interesting is Microsoft\’s stake in the agreement. $2 billion isn\’t exactly a ton to a company the size of Microsoft, but it\’s still a sizable investment, and one that could keep Dell working with Windows machines instead of their competitors. What effect Microsoft owning a piece of Dell will have on the company\’s relationship with other manufacturing partners (Lenovo, HP, etc.) remains to be seen though.

In a statement, the Redmond clan said that it 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.\”

Sources: Dell, Microsoft



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