ENTREPRENEUR Michael Dell is taking his eponymous computer company private in a $24.4 billion (£15.5bn) deal that marks the biggest buy-out since the financial crisis.
Dell’s founder and chief executive has teamed up with private equity firm Silver Lake to buy the firm for $13.65 a share. The billionaire will remain the company’s largest shareholder.
Cash will also come from Dell’s MSD Capital investment firm, a $2bn loan from Microsoft and debt financing from Bank of America Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets.
Dell, set up with a $1,000 loan in 1984 and floated for $85m four years later, has struggled as the focus of the computer market moves away from desktop PCs to tablets and smartphones. The company has also been hit by fierce competition from low-cost rivals.
The share price had fallen from $26 in 2008 to about $11 before news of the buy-out talks broke last month. The drop came despite Michael Dell’s efforts in the five years since he retook the helm of the company following a brief hiatus during which its fortunes waned.
The complex agreement announced yesterday will allow its management to attempt a company turnaround away from the glare and financial pressures of Wall Street.
Analysts said Dell could be more nimble as a private company, but will still have to deal with the same difficult market conditions.
Chief financial officer Brain Gladden said the company’s strategy would “generally remain the same” after the deal closed.