Dell Going Private Leveraged Buyout
Market Context & Analysis
Starting Price: $13.50Michael Dell takes company private in $24.9 billion LBO with Silver Lake. PC market declining—shift to enterprise solutions requires transformation. Public market pressure impeding changes. Activist Carl Icahn opposes deal as too cheap. Eventually approved.
Post-financial crisis recovery. PC market in secular decline as tablets and smartphones grow. Enterprise IT spending shifting to cloud and services.
No major political factors. Shareholder activism at peak. Proxy battles common.
Dell's PC business declining. Needs to transform to enterprise services and storage. Public market quarterly pressure preventing long-term investments. Michael Dell wants control for turnaround.
PC market dead—Dell struggling. LBO price debated—fair or too low? Private ownership allows transformation without quarterly pressure. Skepticism about turnaround ability.
- PC market in secular decline
- Need transformation to enterprise services
- Public market pressure impeding long-term changes
- Michael Dell seeking control
- Carl Icahn fighting deal as too cheap
- Massive debt load from LBO
- Questions about turnaround success