Dell to Go Private in $24 Billion Buyout

by Christopher Freeburn | February 5, 2013 11:38 am

Dell to Go Private in $24 Billion Buyout

DellPromo Dell to Go Private in $24 Billion Buyout[1]Dell (NASDAQ:DELL[2]) is being taken private by a consortium led by its founder and CEO Michael Dell[3].

Michael Dell and Silver Lake Partners, a private equity firm, will pay $13.65 a share, for the computer equipment maker, using financing from Barclays (NYSE:BCS[4]), Bank of America (NYSE:BAC[5]), RBC Capital (NYSE:RY[6]) and Credit Suisse (NYSE:CS[7]), as well as a $2 billion loan for Microsoft (NASDAQ:MSFT[8]). The $24.4 billion deal marks the largest leveraged corporate buyout since the financial crisis five years ago, Reuters noted.

On the news, shares of Dell rose less than 1% to $13.39 a share in Tuesday morning trading.

In addition to the financing, Michael Dell is also committing his 16% stake in the company to the deal[9], which is expected to close during the company’s 2014 second fiscal quarter. Rumors of an impending buyout emerged last week[10].

Dell’s fortunes have declined as sales of personal computers have erroded in the face of increasingly powerful and versatile mobile devices[11], including Apple‘s (NASDAQ:AAPL[12]) iPad andĀ tablets running Google’s (NASDAQ:GOOG[13]) Android operating system.

Taking the company private will give Michael Dell more flexibility in restructuring its operations to meet current market challenges. But the deal must still be approved by shareholders[14].

SomeĀ have criticized Michael Dell for missing many of the recent major technology trends in the computer industry and suggested that someone else might be better to head the firm[15].

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2012/05/DellPromo.jpg
  2. DELL: http://studio-5.financialcontent.com/investplace/quote?Symbol=DELL
  3. consortium led by its founder and CEO Michael Dell: http://www.reuters.com/article/2013/02/05/us-dell-buyout-idUSBRE9140NF20130205
  4. BCS: http://studio-5.financialcontent.com/investplace/quote?Symbol=BCS
  5. BAC: http://studio-5.financialcontent.com/investplace/quote?Symbol=BAC
  6. RY: http://studio-5.financialcontent.com/investplace/quote?Symbol=RY
  7. CS: http://studio-5.financialcontent.com/investplace/quote?Symbol=CS
  8. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  9. committing his 16% stake in the company to the deal: http://investorplace.com/2013/01/why-would-michael-dell-spend-more-dell-money-to-buy-dell/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+InvestorPlace+(InvestorPlace)
  10. emerged last week: http://investorplace.com/2013/02/sources-dell-buyout-could-come-monday/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+InvestorPlace+(InvestorPlace)
  11. erroded in the face of increasingly powerful and versatile mobile devices: http://investorplace.com/2013/01/5-better-ways-to-spend-the-dell-buyout-money/
  12. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  13. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  14. still be approved by shareholders: http://investorplace.com/2013/01/think-the-dell-buyout-fails-heres-your-play/
  15. suggested that someone else might be better to head the firm: http://investorplace.com/2013/01/a-private-dell-should-boot-michael-dell/

Source URL: http://investorplace.com/2013/02/dell-to-go-private-in-24-billion-buyout/
Short URL: http://invstplc.com/1nGUcXY