INSUBCONTINENT EXCLUSIVE:
Dell, which went private in one of the the largest leveraged buyouts in tech circa 2013, announced today that it will once again be going
public through a relatively complex mechanism that will once again bring the company back onto the public markets with founder Michael Dell
and Silver Lake Partners largely in control.
Dell leveraged buyout largely marked the final page in the company storied history as a PC
provider, going back to the old &dude, you&re getting a Dell& commercials
The company rode that wave to dominance, but as computing shifted to laptops, mobile phones, and complex operations were offloaded into
cloud services like Amazon Web Services, Azure and Google Cloud, Dell found itself navigating a complex environment while having to make a
significant business transition beyond the PC era
That meant Dell would be beholden to the whims of public markets, perhaps laden with short-term pessimism over the company urgent need to
find a transition.
The transaction is actually an offer to buy shares that track the company involvement in VMWare, converting that tracking
stock into Dell Technologies stock that would mark its return as a publicly-traded company
Those shares will end up traded on the NYSE, around five years later after its founder took the company private with Silver Lake Partners in
a deal worth roughly $25 billion
Silver Lake Partners owns around24% of the company, while Dell owns72% and will continue to serve as the chairman and CEO of the company
This move helps the company bypass the IPO process, which would remove the whole time period of potential investors scrutinizing the company
(which has taken on a substantial debt load).
Dell said in its most recent quarter it recorded revenue of $21.4 billion, up 19%
year-over-year, and over the past 12 months the company generated $82.4 billion of revenue with a net loss of $2.3 billion
The company said it has also paid down$13 billion of gross debt since its combination with EMC back in 2016
All this has been part of the company transition to find new businesses beyond just selling computers, though there clearly still demand for
those computers in offices around the world
As it has expanded into a broader provider of IT services, it potentially positioned itself as a modern enterprise tools provider, which
would allow it to more securely navigate public markets while offering investors a way to correctly calibrate its value.
