Michael Dell struck a deal to take Dell Inc private for $24.4 billion in the biggest leveraged buyout since the financial crisis, partnering with the Silver Lake private equity firm and Microsoft Corp to try to turn around the struggling computer company without Wall Street scrutiny, Reuters reported.
The deal, which requires approval from a majority of shareholders excluding Dell himself, would end a 24-year run on public markets for a company that was conceived in a college dorm room and quickly rose to the top of the global personal computer business – only to be rendered an also-ran over the past decade as PC prices crumbled and customers moved to tablets and smartphones.
Dell executives said on Tuesday, Feb 5, that the company will stick to a strategy of expanding its software and services offerings for large companies, with the goal of becoming a full-service provider of corporate computing services in the mold of the highly profitable IBM. They played down speculation that Dell might spin off the low-margin PC business on which it made its name.
Dell did not give specifics on what it would do differently as a private entity, angering some shareholders who said they needed more information to determine whether the $13.65-a-share deal price – a 25 percent premium over Dell's stock price before buyout talks leaked in January – was adequate.
As of 2012's fourth quarter, Dell's share of the global PC market had slipped to just above 10 percent from 12.5 percent a year earlier as its shipments dived 20 percent, according to research house IDC.
