Dell, the public company, no more

The deal announced on Tuesday came as no surprise to anyone in the technology industry, but the ripples of this deal will go on for some time. Microsoft’s involvement cements Dell and Windows for the foreseeable future, debunking thoughts that we may see Dell aiming R&D efforts on Android or other 3rd party operating systems. Some institutional shareholders have expressed disappointment at the price paid – $14 a share was seen as a magic number for some, but at this point should the deal fail, the share price could well fall back to c. $10.

Egon Durban, a Silver Lake Managing Partner, said: “Michael Dell is a true visionary and one of the preeminent leaders of the global technology industry,” said “Silver Lake is looking forward to partnering with him, the talented management team at Dell and the investor group to innovate, invest in long-term growth initiatives and accelerate the company’s transformation strategy to become an integrated and diversified global IT solutions provider.”

So what will Dell do? It’s assumed that Michael Dell will give the firm he founded in 1994 some entrepeneurial spark. Dell has chosen a good partner in Silver Lake who were involved in the turn around of Skype over three years, a restructuring that trebled the value of Skype before being sold to Microsoft for $8.5 billion.

Dell saw themselves caught flat-footed by the rise of mobility – iPad and Android tablets created a new market and impinged on Dell’s share of technology spend with Dell’s existing customers. Dell though, were never a technology leader, but an innovator instead in its business model. Over the last couple of years Michael Dell certainly does appear to be be going the IBM route, rather than the Apple route; focusing on higher margin services rather than hardware and walled-garden propriertary services. And yet, Dell could well benefit from the rise of mobility and BYOD with their ownership of SecureWorks and, despite carrying significant debt of c $19 billion after the deal, there are potential acquisitions of firms focussed on MDM, infrastructure and end-point management. The field’s open for Michael Dell now, no shareholders or analysts to worry about every 12 weeks, giving Dell the freedom to focus on creating value in what is now, one of the industry’s most interesting private companies.

Dell statement:

“Dell Inc. today announced it has signed a definitive merger agreement under which Michael Dell, Dell’s Founder, Chairman and Chief Executive Officer, in partnership with global technology investment firm Silver Lake, will acquire Dell. Under the terms of the agreement, Dell stockholders will receive $13.65 in cash for each share of Dell common stock they hold, in a transaction valued at approximately $24.4 billion. The price represents a premium of 25 percent over Dell’s closing share price of $10.88 on Jan. 11, 2013, the last trading day before rumors of a possible going-private transaction were first published; a premium of approximately 35 percent over Dell’s enterprise value as of Jan. 11, 2013; and a premium of approximately 37 percent over the average closing share price during the previous 90 calendar days ending Jan. 11, 2013. The buyers will acquire for cash all of the outstanding shares of Dell not held by Mr. Dell and certain other members of management.”

  1. Coverage at: International Business Times: TechWeek Europe
  2. Dell acquisitions:
Related Posts
Read More

Does Blackberry’s open letter have a return address?

Tomorrow, Blackberry will release a letter to media outletss worldwide. When I got news of this tonight, I stumbled mentally for a moment. I thought it reminiscent of the "There is life after Apple" Chiat/Day letter from Steve Jobs in the Wall Street Journal 25 years ago. For a minute I allowed techno-romance to gnaw at me, but only for a minute. Tomorrow's open missal from Blackberry reminds me more of a fake letter that appeared in Chinese newspaper, The Southern Metropolis Daily a couple of months ago, and then found it's way around China via the micro-blogging Weibo.
Read More

Mavshack VOD teams up with myPhone in Philippines, the video on-demand streaming company has agreed a partnership with MyPhone, the leading distributor of phones in the Philippines. Mavshack is a leader  in streaming local content to global populations and Mavshack Philippines is the first of several content channels being delivered worldwide.  Mavshack operate a multi-platform service similar to Netflix in the Philippines, costing around 210 Philippine Pesos, the equivalent of five dollars per month.
Read More

NASA Game Changing 3D Printing success really matters

Last night I tweeted a link to the Press Release from NASA regarding their success with  testing a rocket engine injector made through additive manufacturing, or as we say these days,  3D printing. What surprised me was the reaction I got via re-Tweets, messages and people just saying 'wow!'. I think what caught people's attention was the potential highlighted by the success in NASA's test, the potential for manufacturing and for business.
Read More

Social Media: quality always tops quantity

In recent years I have had the privilege to speak at a number of different events on Social Media. Typically the area of greatest interest has always been Facebook. The same question always pops up during the Q&A part - “I don’t have a budget for Facebook, how do I get to 100,000 fans?” To be fair, there is not one answer to this question for every industry but I will try to give you an answer that should set you on the right path.

Subscribe for the free weekly newsletter with the latest reviews and any current offers.