Dell is officially off the publicly-traded stock market and is now a private company. This was made possible through a $24.4 billion deal, which includes cash and equity from their CEO Michael Dell, funding from investment firms Silver Lake and MSD Capital, debt financing from a number of banks, Dell’s cash on hand and a $2 billion loan from Microsoft.
Turns out rumors of Microsoft helping the deal push through were true, as evidenced by their loan. The Verge speculates that the generous offer may be a protective move — to make sure a major partner continues to exist with Windows as a focus over Android or even Chrome OS. Here’s Microsoft’s statement regarding the loan:
Microsoft has provided a $2 billion loan to the group that has proposed to take Dell private. Microsoft is 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.
We’re in an industry that is constantly evolving. As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform.
This deal has apparently been in the works since August of last year, which is when Michael Dell discussed his interest in going private with the company’s board of directors. A special committee was formed to help aid Dell in facilitating the transition. This is Michael Dell’s official statement regarding the transaction:
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.
So why go private? Well, Dell won’t have to worry about keeping shareholders satisfied every quarter, and can focus on innovating and turning the company around. But like CEO Michael Dell said, it’s still going to take more time, investment and patience.