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Dell reaches $24.4 billion deal to go private

Jim Burress Feb 5, 2013
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Dell reaches $24.4 billion deal to go private

Jim Burress Feb 5, 2013
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It’s tough to be a computer maker these days. Profits are slim, competition is tight, and shareholder scrutiny is intense. That’s partly why computer maker Dell announced Tuesday it’s going private in a $24.4 billion dollar deal.

Founder Michael Dell, equity firm Silver Lake Partners, and Microsoft are taking the Texas-based company off the market in an effort to make the company more agile, and hopefully, more profitable.

Business Insider CEO Henry Blodget says shareholders will probably be happy with the 25 percent premium the company will pay to buy back Dell stock.

But “on the other hand, you’re probably kind of frustrated that if Michael Dell has some brilliant ideas for how to make Dell much more valuable, that he’s not just doing that with you as a shareholder,” says Blodget.

Dave Johnson, senior analyst with Forrester Research, says the deal is good for business customers because a Dell/Microsoft partnership strengthens both players.

“A relationship with Dell gives them the opportunity to share more knowledge and learning around hardware manufacturing and hardware supply chains,” says Johnson.

Shareholders still must approve the deal.

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