Dell To Go Private In a $24.4 Billion Deal

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On Tuesday, Michael Dell, owner of Dell Inc, sealed a $24.4 billion deal to take the company private in an effort to increase its value, despite the protests of some shareholders.

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Image source: Reuters.Com

The purchasers’ agreement, which also includes Microsoft, will pay almost $14 a share in cash. That is approximately more than 25 percent where Dell’s stock traded before word came out of the agreement of its sale. Michael S. Dell will share his wager about 14 percent toward the transaction and will contribute additional cash through his private investment firm. Silver Lake is also expected to contribute about $1 billion in cash, while Microsoft will loan an additional $2 billion.

Micheal Dell excluded himself from any discussions about the transaction and did not vote on the deal, but will seek to uplift the company after years of decline. According to the Wall Street Journal, the company executives say Dell is "increasingly worried about his legacy," and is reported to have lost enthusiasm for running the company since he returned as CEO in 2007.

The arrival of new competition, first from other PC manufacturers and then smartphones and the iPad, critically eroded Dell's business,causing the company to lose more than a third of its value in 2012. This is why Microsoft is expected to share some of its great financial muscle to help Dell regain its footing in the industry.

"I believe this transaction will open an exciting new chapter for Dell, our customers and team members. 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," Dell says of the buyout.

Watch the video announcement on Dell's decision to go private:

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