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Dell Agrees to Go Private in Management Buyout at $13.65 Per Share

Dell Agrees to Go Private in Management Buyout at $13.65 Per Share
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The speculation and the waiting game is over: Dell has agreed to go private in a management buyout, led by founder Michael Dell, for $13.65 per share. Dell shares were halted on the announcement.

The deal had been rumored for weeks and now is official. The deal, at $13.65 per share, represents a premium of about 3 percent over the closing price Monday.

The transaction values the company at approximately $24.4 billion and represents a premium of 37 percent over the average share price over the last 90 days.

A Special Committee was formed after Mr. Dell first approached Dell's Board of Directors in August 2012 with an interest in taking the company private. Led by Lead Director Alex Mandl, the Special Committee retained independent financial and legal advisors J.P. Morgan (NYSE: JPM) and Debevoise & Plimpton LLP to advise the Special Committee with respect to its consideration of strategic alternatives, the acquisition proposal and the subsequent negotiation of the merger agreement.

Mr. Dell said: “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.”

"Michael Dell is a true visionary and one of the preeminent leaders of the global technology industry," said Egon Durban, a Silver Lake Managing Partner.

"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."

Michael Dell will continue to run the company as Chairman and CEO once it formally goes private. He currently owns approximately 14 percent of shares and will contribute more cash as part of the MBO.

The transaction will be financed through a combination of cash and equity contributed by Mr. Dell, cash funded by investment funds affiliated with Silver Lake, cash invested by MSD Capital, L.P., a $2 billion loan from Microsoft (NASDAQ: MSFT), rollover of existing debt, as well as debt financing that has been committed by BofA Merrill Lynch (NYSE: BAC), Barclays (NYSE: BCS), Credit Suisse (NYSE: CS),and RBC Capital Markets (NYSE: RBC), and cash on hand.

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