Dell to be bought back by founder (UPDATED)

By Stuart Sumner
05 Feb 2013 View Comments
Dell founder Michael Dell

PC manufacturer Dell has announced that it is to be acquired by its founder Michael Dell, and his private equity investment partners Silver Lake.

In a statement on Dell's website, the firm explained that Dell stockholders will receive $13.65 in cash for each share. This values the firm overall at about $24.4bn.

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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."

Forrester analyst Dave Johnson explained that the deal shouldn't affect the firm's customers in the short term.

"[There will be no impact on customers] right now. There will be changes, no question, but customer-facing roles usually get shored up during transitions like this to help ease the risk and keep relationships intact.

"Also, we don't expect Dell to jettison the PC business. It's easy to draw comparisons to IBM and Lenovo, and one could argue that the case for running an OEM hardware business out of the US is sketchy, but IBM had many other very strong businesses to fall back on. PCs still make up a significant piece of the pie for Dell and they'll need the cash-flow to double-down on the areas where they can drive new value and differentiation.

"Summary: I'm bullish on the potential benefits of a private equity transaction for Dell."

Egon Durban, managing partner at Silver Lake, said: "Michael Dell is a true visionary and one of the preeminent leaders of the global technology industry.

"Silver Lake is looking forward to partnering with him, the talented management team at Dell and the investor group to innovate, invest in long-term growth initiatives and accelerate the company's transformation strategy to become an integrated and diversified global IT solutions provider."

The deal has also been part funded to the tune of $2bn by Microsoft.

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