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Dell Goes Private In $24.4B Deal

 February 05, 2013 10:24 AM

(By Balachander) Dell Inc. (NASDAQ: DELL) has agreed to be taken private in a deal worth roughly $24.4 billion or $13.65 per share in cash in the largest leveraged buyout since the global financial crisis.

The deal represents a premium of 3 percent to Dell's previous closing price.

Dell shares rose 0.79 percent to trade at $13.38 in early trade on Tuesday.

Under the terms of the agreement, Dell's Founder, Chairman and Chief Executive Officer Michael Dell and global technology investment firm Silver Lake, will acquire the PC maker.

"Dell has made solid progress executing this strategy over the past four years, but 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," commented Dell, who owns roughly 14 percent of the company's shares.

[Related -Microsoft Corporation (MSFT) Earnings Preview: What To Watch In Q2 Results?]

Following completion of the deal, Dell will continue to lead the company as Chairman and CEO and will maintain a significant equity investment in Dell by contributing his shares of Dell to the new company, as well as making a substantial additional cash investment.

Dell said the acquisition will be financed through a combination of cash and equity contributed by Dell's CEO, cash funded by investment funds affiliated with Silver Lake, cash invested by MSD Capital L.P. and a $2 billion loan from Microsoft (MSFT), among others.

[Related -Microsoft Corporation (MSFT): Good Buy or Good-Bye?]

istockanalyst had noted that Check Point Software Technologies Ltd. (NASDAQ: CHKP) and Fortinet, Inc.(NASDAQ: FTNT) would be the key winners as these companies could gain share in the Unified Threat Management (UTM) market on the potential acquisition of Dell.

"We believe CHKP and FTNT could be near-term beneficiaries of Dell's potential take-out deal if it does eventually occur," Oppenheimer analyst Shaul Eyal wrote.

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