Dell goes private in a $24.4 Billion deal – Microsoft in for $2 Billion

The rumors were true!

Dell has officially closed a buyout of the company, removing the company from the publicly-traded stock market and into private hands.

The deal is being financed by a mixture of cash and equity from CEO Michael Dell, firms Silver Lake and MSD Capital, a $2 billion loan from Microsoft, and debt financing from a number of banks as well as Dell’s cash on hand.

Dell’s shareholders will receive $13.65 for each share of common Dell stock they hold, up about 25 percent from Dell’s closing share price of $10.88 back on January 11th, which Dell says is the last day prior to rumors of the buying starting to circulate.

Those rumors have escalated in the last week last week — Bloomberg and The Wall Street Journal reported that discussions to bring Dell private were serious, and that a deal could be reached in the following six weeks.

Statement from Microsoft:

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.
Dell has struggled in recent years to maintain its position in the PC industry, losing more than a third of its value in 2012. By going private, however, the company won’t have to deal with quarter-to-quarter scrutiny from shareholders as it attempts to turn things around. According to Dell’s press release, the company has been investigating this process since August of 2012, when Michael Dell approached the company’s board of directors with to discuss his interest in taking the company private. From there, a “special committee” was formed to lead Dell through the transition.

Statement from Michael Dell:

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.

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