Changes ahead as Dell goes private

February 28, 2013 by  

As Dell Inc. makes the move from publicly traded to private company, there has been plenty of talk both in the computer industry and in Dell’s home city of Round Rock.

Competitors are no doubt hungrily reaching for their contact lists and digital business cards, while others in the industry point out the positives in what will certainly be a shake-up for the personal computer giant.

A $24bn buyout of the company’s public shares was negotiated early this month between company founder and 14% shareholder Michael Dell, his supporting investment firm Silver Lake Partners, and the buyers’ consortium.

Dell’s public releases state that this privatization is part of a “long-term” strategy that analysts guess may involve moving away from PC sales. At least some industry insiders feel that Michael Dell is freeing himself from the demands of investors in order to more easily move the company away from PC construction and towards providing IT solutions for private and government entities, including a managing partner at Silver Lake, who said:

“Silver Lake is looking forward to partnering with him [Dell], the talented management team at Dell and the investor group to innovate, invest in long-term growth initiatives and accelerate the company’s transformation strategy to become an integrated and diversified global IT solutions provider.”

The agreed price, $13.65 per share, represents a 37% premium over the stock’s recent 90-day average. Barring the appearance of a better deal during a 45-day “go-shop” period, the company will go private.