Dell Inc to go private in $24.4 billion deal, Michael, Silver Lake pay $13.65 per share, Microsoft $2 bn
buyers. The remaining money to pay for the acquisition is being borrowed through loans arranged by several banks, saddling Dell with an estimated $15 billion in debt that could raise doubts about its financial stability among its risk-averse corporate customers.
The sale is structured as a leveraged buyout, which requires the acquired company to repay the debt taken on to finance the deal.
Dell's sale is the second highest-priced leveraged buyout of a technology company, trailing the $27 billion paid for First Data Corp. in 2007.
The deal is the largest leveraged buyout of any type since November 2007 when Alltel Corp. sold for $25 billion to TPG Capital and a Goldman Sachs subsidiary. Within a few months, the U.S. economy had collapsed into the worst recession since World War II.
Dell's decision to go private is a reflection of the tough times facing the personal computer industry as more technology spending flows toward smartphones and tablet computers. PC sales fell 3.5 percent last year, according to the research group Gartner Inc., the first annual decline in more than a decade. What's more, tablet computers are expected to outsell laptops this year.
The shift has weakened long-time stalwarts such as Dell, fellow PC maker Hewlett-Packard Co., chip maker Intel Corp. and Microsoft Corp.
Michael Dell, 47, is betting that his company will be able to evolve into a more diversified seller of technology services, business software and high-end computers without having to pander to the stock market's fixation on whether earnings are growing from one quarter
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