Dell goes private in $25bn buyback deal

Michael Dell has won his battle to privatise the company he founded in 1984, with shareholders voting in favour of the buyback.

Michael Dell has won his battle to privatise the company he founded in 1984, with shareholders voting in favour of a $25bn buyback deal.

Dell, in partnership with investment firm Silver Lake Partners, will acquire the struggling PC maker. Dell shareholders will receive $13.75 in cash for each share of Dell common stock they hold, plus payment of a special cash dividend of $0.13 per share.

The vote was more of a formality after Carl Icahn, the activist investor, pulled out of his bid to block the privatisation.

Michael Dell, chairman and CEO of Dell, said: “As a private enterprise, with a strong private-equity partner, we will serve our customers with a single-minded purpose and drive the innovations that will help them achieve their goals.

"This is the start of a new era in Dell’s history. The company will expand its enterprise solutions and services business. Our team members will be Dell's most valuable asset and the key to our future success.”

Dell is taking the company he founded private in order to reshape the business without the scrutiny of Wall Street and investors. The firm has seen big drops in profit as PC sales decline, and Dell has not been successful moving into the fast-growing smartphone and tablet markets.

Michael Dell is expected to build up Dell's services and infrastructure businesses to balance out the loss of PC revenue. Slow take-up of Windows 8 also meant there was not the usual boost to PC buying associated with a new version of the Microsoft operating system.

When Dell Services head, Kevin Jones, met with Computer Weekly recently he said the services business now integrates several acquisitions into its traditional end-user managed services. Jones said the acquisition of Perot Systems brings intellectual property in the healthcare and government sectors, which is is important to Dell Services if it wants to win business in mid-sized public sector organisations like local government, NHS trusts and the police.

The transaction is expected to close before the end of the third quarter of Dell's 2014 fiscal year, subject to the satisfaction of customary closing conditions, including regulatory approval.

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