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Finance

Dell returns to private ownership with $24.4bn, founder-led buyout

Dell returns to private ownership with $24.4bn, founder-led buyout

Tue 05 Feb 2013 2:41pm GMT / 9:41am EST / 6:41am PST
HardwareFinance

Microsoft invests loan of $2 billion into financing deal

PC manufacturer Dell has been bought out in a $24.4 billion deal - led by a consortium of investors including founder Michael Dell.

Alongside Michael Dell, other investors include Silver Lake and Microsoft, which has made a loaned contribution of $2 billion to the deal. The buyout represents the largest deal of its kind since the current round of economic recession began in late 2007 and the largest leveraged buyout of a tech company ever.

The company is still taking bids, fulfilling its requirements of keeping options open for the next 45 days, but it's extremely unlikely that the consortium will be forced out.

As PC sales have come under assault from tablets, they have fallen for the first time in a decade in recent months, with estimated market shrinkage of around 3.5 per cent. PC manufacturers have turned to software and consultancy markets, as well as tablet manufacture itself, to combat this shrinkage - something which Dell has experienced the sharp end of itself.

Microsoft has a vested interest in keeping the desktop and laptop market healthy for the sale of software and Dell currently representing such a major customer for the corporation, the purpose of the $2 billion investment becomes apparent.

"Microsoft has provided a $2 billion loan to the group that has proposed to take Dell private," read a Microsoft statement to press. "Microsoft is committed to the long term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future.

"We're in an industry that is constantly evolving. As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform."

5 Comments

Greg Wilcox
Creator, Destroy All Fanboys!

1,993 902 0.5
And The Wall Street Journal ran a radio piece on this saying this means "the PC is officially dead" ... which is a bit premature if one happens to be a PC gamer. So I guess that crowd will need to glare at the WSJ editorial board or something.

Posted:A year ago

#1

Anthony Chan

83 68 0.8
WSJ definitely does say the strangest things. PC is far from dead. Though potential impact would be a shift of marketing from one of the largest PC retailers in the world - towards smart mobile, tablet, and notebook computing. Gaming desktops will probably shift more towards a niche market in the grand scheme of things, though this seemed like the trend to begin with. And this is if Dell even decides to question gaming in its line of products.

Posted:A year ago

#2

Peter Dwyer
Games Designer/Developer

458 254 0.6
If Dell continue to create all-in-one pcs like the xps one 27 then I'm not seeing any deaths just yet. The problem is that companies never seem to know when they are on to a good thing and even the current xps one 27 has an under powered graphics chip.

Tablets and touch screen all in ones is the way to go. The consumer has shown that this is what they want i.e. plug and go hardware. The age of the base unit may be dead but, the age of the desktop certainly isn't.

Posted:A year ago

#3

Nicholas Pantazis
Senior Editor

969 1,162 1.2
@ Peter I don't even think the age of the base unit is dead, at least in the custom/self-built market. It's certainly true that the average consumer is done with those though, and they're left for gamers and high-end tech workers.

Posted:A year ago

#4

Kieren Bloomfield
Software Engineer

88 71 0.8
Not forgetting the business market. What kind of computer is on your desk at work? Unlikely your desktop PC is going to be replaced by a tablet...

Posted:A year ago

#5

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