Austin-based Dell goes private in sweeping $24 billion buyout
In a sweeping $24.4 billion buyout, Dell announced Tuesday that the computer company, struggling to compete in the personal computer market against stiff competition from mobile phones and tablet computers, will go private.
CEO and founder Michael Dell issued the following as part of his statement:
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.
The buyout was brokered between Dell, Microsoft and rising investment firm Silver Lake and will ostensibly return more control of the company to Dell, who founded the company from his dorm room in 1984. But as reported by the New York Times, analysts are bearish on the idea that the company will be able to turn itself around after years of failed reinvention efforts.
In a statement, Egon Durban, a managing partner at Silver Lake, expressed optimism:
Michael Dell is a true visionary and one of the pre-eminent leaders of the global technology industry. Silver Lake is looking forward to partnering with him, 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 I.T. solutions provider.
Rumors of the computer company going private having been swirling in the past few weeks, mostly hedged by the fact that the deal could very easily fall apart at the eleventh hour. Dell Inc., according to the Austin Business Journal, is the third-largest employer in the Austin area, with about 12,000 local employees. What the move to the private sector means for these employees is unclear.
But it would appear that Dell (the company’s leader, if not necessarily his Round Rock-based company) is invested in sticking close to the Texas capital: The Michael and Susan Dell Family Foundation committed to a $60 million contribution to the University of Texas at Austin’s new medical school just last week.