Preparations for Dell’s Buyout at Full Swing

Silver Lake Attempts to Finalize Bidding Group for Dell

by Anton Shilov
01/17/2013 | 11:59 PM

Silver Lake Management LLC and partners are reportedly on the homestretch to finalize a bidding group for a buyout of Dell, the world’s No. 3 supplier of personal computers. The private equity fund is in talks with huge banks and other potential investment partners. Meanwhile, it still remains unclear whether Michael Dell, the founder of the company and its current CEO, plans to participate in the privatization process.

 

Silver Lake is currently leading the effort to perform the largest transaction since the global financial downturn in 2008. Apparently, TPG Capital and KKR & Co. (KKR), which are known for investments into large tech companies, decided not to participate, reports Bloomberg news-agency. As a result, Silver Lake is in talks with multiple potential partners, including the $170 billion Canada Pension Plan Investment Board, reports Reuters news-agency. The actual deal could be announced as soon as next Tuesday, on May 22, 2013.

Citing its own sources, Bloomberg further reports that the technology-focused buyout firm’s financing is crucial to completing a leveraged buyout of Dell. The rest of the funds to take Dell private would come from Silver Lake and its partners, Dell itself or Michael Dell, the founder of the company.

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 ongoing 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, Silver Lake and other companies did not comment on the news-story.