Dell Technologies won a shareholder vote to return to public markets, putting founder Michael Dell on the winning side of a transformative transaction that polarised investors for the second time in five years.
The world’s largest private technology company secured more than 61% of its tracking stock DVMT’s unaffiliated shareholders. Of those who cast a ballot, 89% voted in favour. DVMT acts as a proxy for Dell’s stake in software maker VMware. Between Dell and its EMC, it employs around 3,000 people in Cork and 2,000 staff in Limerick and Dublin.
Texas-based Dell will buy out DVMT in a cash and share-swap deal that values DVMT’s market capitalisation at $23.9bn (€21bn). The computer giant said it will list on the New York Stock Exchange as soon as December 28. After going private in one of the biggest leveraged buyouts ever, Dell will relist as a financially stronger and more diverse leader in computer equipment and software, though more burdened by debt.
The move will help simplify a tangled corporate structure that holds together a tech empire ranging from servers to security software and give the company greater flexibility to raise capital, boost its value and pursue stock-based acquisitions. It will also allow key investor Silver Lake, which helped take Dell private in 2013 in a deal worth about $24bn, to make its stake more liquid. The path to the vote hasn’t been easy, as investors baulked at Dell’s initial offer and forced it to sweeten the bid to get the transaction over the finish line. Dell increased its offer to about $120 a share in cash and stock, from $109 — financed by Dell and a special dividend from VMware. “With this vote, we are simplifying Dell Technologies’ capital structure and aligning the interests of our investors,” Michael Dell, the chief executive officer of the company he founded in his dorm room, said in a statement. In its time away from public market scrutiny, Dell, once a household name for personal computers, has invested in boosting its capabilities in cutting-edge software and cloud integration.
It’s now known for its lineup of servers, storage hardware and networking gear. Through its $67bn acquisition of EMC in 2016, Dell also now has a growing suite of software tools. The company has sought a symbiotic relationship with its hardware and software -- chasing closer integrations between the two and selling both to customers to extract higher profit margins. Dell created its tracking stock to help finance the EMC purchase, the largest technology takeover ever at the time and one that nearly tripled the company’s debt load.
- Bloomberg. Additional reporting Irish Examiner