Dell Exits Public Stock Market and Goes Private In $24.4 Billion Deal

Dell has today officially closed the ability to buyout of the company, which means the company is now off the publicly traded stock market and into private hands. The financing for the deal has come from CEO Michael Dell’s cash and equity, funds from investment firms Silver Lake and MSD Capital, and a $2 billion loan from Microsoft. There is also debt financing from a number of banks, along with Dell’s cash on hand. Shareholders of Dell’s stock will receive $13.65 for each share of common Dell stock they hold.

Reports that Dell were due to pull out of the stock market and go private were first posted by Bloomberg and The Wall Street Journal. They said that top exes were serious about bringing Dell into the private stock market, as their revenue failed to expand in the last 24 months. Later reports came through that Microsoft were looking to invest in Dell, and that the company was in talks with two finance sources to help secure the deal in January when they were trading $13.50 and $13.75 a share. Those two sources later turned out to be Silver Lake and Michael Dell himself.

The Wall Street Journal is now citing top execs as saying that Michael Dell is a man who is “worried about his legacy” and that he has subsequently lost interest in running the company day-to-day since reclaiming his position as the CEO of the company in 2007.

By going private it means Dell no longer have to deal with the quarter-to-quarter scrutiny it gets from shareholders

Microsoft’s part of the negotiations helped broker the deal, offering $2 billion to facilitate the sale. The whole reason being to ensure that major partners still persist across the Windows platform over the competition. In a statement released by Microsoft, they said they are “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.” Dell also has access to more than 2,400 patents, which Microsoft may want to look into in the future.

By going private it means Dell no longer have to deal with the quarter-to-quarter scrutiny it gets from shareholders as it tries to reinvent itself and turn things around. Dell’s press release rather interestingly states that since August 2012, Michael Dell approached the companies board of directors to discuss taking the company private. From then on in, a ”special committee” was formed to help lead Dell through the transition phase.

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