Dell has confirmed it is to go private again, with founder Michael Dell leading a $24.4bn (£15.5bn) buyout, backed by private equity house Silver Lake.
The $13.65-a-share cash deal represents a 37 per cent premium on the vendor's average closing share price for the 90-day period up to 11 January. Acting on the recommendation of a special committee of independent directors, the Dell board of directors – excluding Michael Dell himself – has unanimously approved the deal.
Evercore Partners has been retained to oversee a so-called "go-shop" process, during which the management consulting firm will work with the special committee to "actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals". The go-shop period lasts an initial 45 days, at the conclusion of which the special committee will enter into discussions with any parties offering qualifying competitive bids.
The closure of the deal is also dependent on a number of other conditions being met, including a vote of unaffiliated stockholders. Michael Dell (pictured above left) currently owns 14 per cent of the company that bears his name, and the buyout will be financed by his own cash and equity, company cash on hand, Silver Lake investment funds, rollover of existing debt and debt financing provided by BofA Merrill Lynch, Baclays, Credit Suisse and RBC Capital Markets.
MSD Capital – an investment firm formed 15 years ago solely to look after the Dell family's investment – will also back the deal with a cash investment, and $2bn will come from a loan provided by Microsoft.
If and when the transaction completes, Michael Dell "will maintain a significant equity investment" in the PC maker "as well as making a substantial additional cash investment". He will retain his position as chief executive and chairman, and the vendor will continue to be headquartered in Round Rock, Texas.
"I believe this transaction will open an exciting new chapter for Dell, our customers and team members," said 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.
"Dell has made solid progress executing this strategy over the past four years, but we recognise 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."
Egon Durban, Silver Lake managing partner, added: "Michael Dell is a true visionary and one of the pre-eminent 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."
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