Dell Inc announced today that it became a privately held company in a deal worth $24.4 billion. The key players in the deal are Michael Dell, the company's CEO and Founder, investment firm Silver Lake Partners and Microsoft. Dell shareholders will receive $13.65 in cash for each share of Dell common stock they hold which is about 25 percent more than the stock's closing price on January 11.
The transaction is done through a combination of cash and equity contributed by Michael Dell as well as a loan of $2 billion from Microsoft and $1 billion from Silver Lake Partners. Barclays, Bank of America Merrill Lynch, Credit Suisse and RBC Capital will help in the investment deal with up to $15 billion. Following completion of the transaction, Michael Dell will continue to lead the company as Chairman and Chief Executive Officer.
"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," said Michael Dell, CEO and Founder of Dell Inc.
In addition to the announcement, the deal will close before the end of the second quarter of Dell's FY2014. Dell's two major competitors are split on the decision to take the company private. While HP criticized Dell in their official press release saying "the company faces an extended period of uncertainty and transition that will not be good for its customers," Lenovo said to TechRadar that "the financial actions of some of our traditional competitors will not substantially change our outlook."
We just have to wait to see the outcome, but what do you think about Dell as a privately held company?