Computer giant Dell Inc. this month announced the privatization of the company.
In a $24.4 billion merger, company founder, chairman and CEO Michael Dell, in partnership with global technology investment company Silver Lake, will acquire the American computer maker. Microsoft contributed a $2 billion loan to help make the deal possible.
Michael Dell will continue to be the company’s chairman and chief executive officer. In addition, the headquarters will remain in Round Rock, Texas.
This is the largest technology buyout in history, a record previously held by the $17.5 billion Freescale Semiconductor deal in 2006. It’s also Silver Lake’s biggest deal, besting the $16 billion the company paid for Intelsat in 2007.
The computer maker is the third largest PC vendor in the world, and almost half of its revenue comes from sales of desktop and notebook PCs. However, its sales have decreased drastically, as China’s Lenovo and Tiawan’s ASUSTeK have proven to be formidable competitors in the market for economically priced computers.
In addition, the demand for these products has decreased as more companies and consumers opt for mobile devices, such as smartphones and laptops. And while the company recently started marketing tablets that use Microsoft software, these efforts have yet to make a dent in the world of mobile devices.
Taking the company private will allow Dell to focus on restructuring the company to meet the needs of 21st century businesses and consumers. In a statement, Michael Dell said, “I believe this transaction will open an exciting new chapter for Dell, our customers and team members.” He noted that the company has been consistently making progress in its long-term strategy, but said, “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.”
Other companies in Silver Lake’s portfolio include Alibaba Group, Avaya, Go Daddy, Groupon and SunGard.
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