Dell Deals Another Dandy, Going Public Once Again

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Michael Dell, who now owns 72 per cent of Dell Technologies common shares, struck a deal with the private equity firm Silver Lake to take the company private in 2013 in an effort to reorganize without pressure from public shareholders.

The US-based PC and data storage company announced a $21.7 billion agreement on Monday to buy out the holders of shares that track the performance of VMware using a mix of cash and equity in Dell.

The move comes after a 2013 private equity buyout led by Michael Dell aiming to revive the company that fell behind when consumers turned to mobile devices instead of PCs. Dell says the offer of $109 represents a 29 percent premium over the Class V share closing price prior to the announcement.

Once that deal is completed, the Dell Class C shares will be listed on the New York Stock Exchange.

The transaction needs a nod from Class V shareholders. After VMware shareholders choose whether they want cash or Dell stock, Dell sharehlders will own between 20.8% and 31% of Dell.

"Unprecedented data growth is fueling the digital era of IT, and we are uniquely positioned with our portfolio of technologies and services to enable the digital, IT, security and workforce transformations of our customers", Dell said in a prepared statement Monday. VMware specializes in virtualization, a technology which allows multiple systems and applications to run at the same time on the same server, which can cut companies' IT costs. The merger of Dell and EMC was the largest tech merger in history making Dell Technologies the largest privately held tech company. VMware will remain a stand-alone company, and Dell will continue to own 81 percent of VMware's common stock.

Dell in its early years focused on commercial clients, but that changed in the late 1990s when it garnered a huge following among techies who desired more options in customizing PCs. However, a special committee of VMware's board of directors formed to safeguard the interest of VMware minority shareholders pushed back against the terms that Dell was proposing, according to sources familiar with the matter.

Earlier this year, Dell disclosed that it was considering a reverse merger with VMware as part of its public market return.

"Dell is a very different company than it was five years or so years ago".

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