recommended reading

Everything you need to know about the Dell buyout

Ross D. Franklin/AP

After weeks of rumored talks, Dell has announced its sale to Microsoft, Silver Lake Partners, and founder Michael Dell for $24.4 billion, the biggest leveraged buyout since the 2008 financial crisis. The company went for $13.65 per share to its investors, according to DealBook's Michael De La Merced. Dell will own the largest stake at 16 percent, valued at $3.7 billion, after the transaction. In addition, Microsoft put in $2 billion, Silver Lake put in another $1 billion and BofA Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets put in a $15 billion debt financing package, as well. For those just catching up to the weeks of rumors, here's what it all means:

Why does Dell want to go private?

In short: It's not doing so well as a public company anymore. Over the last year its stock has seen a steady decline, which only had an uptick once rumors of its sale started circulating around mid-January, as you can see below. As you can see, the sale price of $13.65 is somewhere around a 25 percent premium on what the stock was trading at before the rumors of a sale began. The move also has a lot to do with the ego of its founder, sources told The Wall Street Journal's Ben Worthen and Anupreeta Das. "Interviews with current and former Dell executives, plus other people who know the CEO, paint a picture of a man who appeared increasingly worried about his legacy," they write. He also hated the comparison to Apple, or what his company could have been. 

Why all the financial trouble, though? 

While "Dell Dude" Ben Curtis would say his absence from the company's advertising was the cause of its downfall, the computer-makers financial troubles have coincided with the death of the PC. For Dell in particular, its global computer shipments, which make up most of its revenue, declined by about 5 percent last quarter from the year before. A lot of that has to do with the increasing popularity of tablets and mobile phones. Tablet sales, for example, have grown from 17 million in 2010 to 122 million in 2012,according to a report from Business Insider. Mr. Dell himself admits he was surprised by the rise of these portable computer slabs. "I didn't completely see that coming," he told Worthen and Das. In addition, the poster-child for early '00s dorm room computers also failed to make the transition from hardware to business services, something its founder tried and failed to do, they add. 

Read more at The Atlantic Wire

Threatwatch Alert

Thousands of cyber attacks occur each day

See the latest threats


Close [ x ] More from Nextgov

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

  • PIV- I And Multifactor Authentication: The Best Defense for Federal Government Contractors

    This white paper explores NIST SP 800-171 and why compliance is critical to federal government contractors, especially those that work with the Department of Defense, as well as how leveraging PIV-I credentialing with multifactor authentication can be used as a defense against cyberattacks

  • Toward A More Innovative Government

    This research study aims to understand how state and local leaders regard their agency’s innovation efforts and what they are doing to overcome the challenges they face in successfully implementing these efforts.

  • From Volume to Value: UK’s NHS Digital Provides U.S. Healthcare Agencies A Roadmap For Value-Based Payment Models

    The U.S. healthcare industry is rapidly moving away from traditional fee-for-service models and towards value-based purchasing that reimburses physicians for quality of care in place of frequency of care.

  • GBC Flash Poll: Is Your Agency Safe?

    Federal leaders weigh in on the state of information security


When you download a report, your information may be shared with the underwriters of that document.