It's official: Dell is going private. Today, the company announced that stockholders have approved a buyout by eponymous founder, chairman, and CEO Michael Dell and private equity firm Silver Lake Partners.
Stockholders will be paid $13.88 in cash per share, plus a $.08 per share dividend for the third fiscal quarter, bringing the total buyout price to $24.9 billion.
News of the discussions between Dell and private equity firms, including Silver Lake, broke in January of last year. But the idea has been in the works for much longer. Michael Dell first mentioned the possibility in 2010, and he has reportedly been in talks to take the company private since June 2012.
Dell's traditional businesses -- PCs and server hardware -- are in decline. Mobile devices like smartphones and tablets are eating away at desktop sales, and the new world of custom servers has seriously changed the data center landscape. So the company has been transforming itself into an enterprise software and services company. Michael Dell argues that the company will be better able to complete this transformation as a private company.
He may be right. HP has struggled with a similar transition, and in 2011, the HP board fired then CEO Leo Apotheker over a controversial acquisition of enterprise software company Autonomy. Dell may be more free to make bold decisions -- and to think more clearly about the ramifications of such decisions -- in a private environment.
But Dell's transition from public to private company hasn't been smooth. Michael Dell owned 15.7 percent of the company himself, but had to convince the rest of the shareholders to agree to a buyout. Activist shareholder Carl Icahn fought the process. But as Dell's profits tanked by 79 percent, a buyout deal had to look attractive to stockholders.
Meanwhile, Dell has been on an acquisition spree. It began in 2010 with a public bidding war with HP over storage company 3Par. Dell ultimately lost, but has been on a shopping spree ever since, acquiring cloud management company Enstratius, software-based networking company RNA Networks, database management company Quest, and the storage company Compellent, among others.
