Is Dell Technologies going public again?
If media reports are to be believed, Dell Technologies is planning to go public again. This comes five years later Dell had gone private and invested heavily while expanding into hardware, software and datacenter services. If this is true, going public will help the company pay most of its debt, but the move would not however change Dell's control over VMware (which it took when it bought EMC).
According to the announcement made by the company, Dell would pay USD 21.7 billion in cash and stock to buy back shares tied to its interest in software company VMware. The company further added that the agreement values its equity between USD 61.1 billion and USD70.1 billion. This value is more than twice the value of the USD 24.9 billion deal that Michael Dell, the founder and CEO, and buyout firm Silver Lake settled for to take the company private in 2013.
This settlement would mean two things – first, Dell will not have to raise any new money and so will bypass the IPO route. Second, it will pay by issuing new shares, and with the USD 9 billion dividend that it will receive from VMware.
After the closure of the deal, Michael Dell will own 47 percent to 54 percent of the combined company, while Silver Lake will own between 16 percent and 18 percent, as per a regulatory filing.
In 2016, Dell paid USD 67 billion for the storage hardware company EMC, and software companies VMware and Pivotal. This is not the first time post going private that Dell tried to go public again. There were reports of a reverse merger also where Dell was contemplating of selling itself to VMware.
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