Dell Inc. OKs private acquisition with investment group led by Michael Dell

Dell Inc. announced Feb. 5 it had signed a $24.4 billion purchase agreement with company founder, chairman and CEO Michael Dell that will return the company to private ownership.

According to the company, Michael Dell, in partnership with the technology investment firm Silver Lake, will pay Dell Inc. stockholders $13.65 per share—a 25 percent markup from the company's Jan. 11 closing price of $10.88, the day rumors of the acquisition became public.

"I believe this transaction will open an exciting new chapter for Dell, our customers and team members," Dell said. "We can deliver immediate value to stockholders while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise."

Dell and Silver Lake Managing Partner Egon Durban said the acquisition would allow Dell Inc. to execute its long-term strategy of focusing on becoming an integrated global IT solutions company and away from its original design as a computer hardware manufacturer. Without the pressure to satisfy stockholder demands, the company could enjoy greater freedom to shift its business focus.

Dell, who currently retains approximately 14 percent of the company's stock, is expected to continue in his role as chairman and CEO of Dell Inc. The company said in a statement that its headquarters will remain in Round Rock.

The agreement allows for a 45-day "go-shop" period in which Dell Inc. is allowed to solicit counteroffers for the rights to purchase the company.

"The go-shop process provides a real opportunity to determine if there are alternatives superior to the present offer from Mr. Dell and Silver Lake," said Alex Mandl, lead director of Dell Inc.'s board of directors.

The deal is being financed by cash and equity provided by Michael Dell and Silver Lake, along with a $2 billion loan from Microsoft. Bank of America, Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets are also providing financing for the deal.