Dell, a leading maker of personal computers that lost substantial part of its market share and value in the recent years, is reportedly in talks to go private. Taking the company private could help Dell to accelerate its strategic changes and avoid criticism from public shareholders, but will have transform into a very different company in a few years.
Dell is discussing going private with leading equity firms, including TPG Capital and Silver Lake, reports Bloomberg news-agency citing people familiar with negotiations. The deal could be announced as early as later this week. The transaction, if it happens, will be among the largest IT deals ever conducted. For example, it could be compared to Hewlett-Packard’s acquisition of Compaq in 2002 for about $19 billion.
Numerous large banks have been contacted about financing an offer. Dell had a market value of $18.9 billion as of January 11, 2013; hence, private equity firms could pay over $20 billion for the company. What should be kept in mind is that Michael Dell has a net worth of $13.7 billion and could also help to finance the transaction.
According to Michael Dell, the chairman and chief executive officer of Dell, he did consider taking the company private back in 2010. In theory, it would be considerably easier for Dell to renovate the company without a close control from public investors. Keeping in mind massive changes on the market of personal computers in particular and IT in general, Dell needs to be transformed into a company that can better respond to modern challenges.
Dell did not comment on the news-story.