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Dell Inc. is preparing to conclude an agreement that would once again make the PC giant and data storage company a public company, according to people close to the case.
Dell plans to announce as early as Monday its intention to acquire via an exchange of securities, the DVMT tracking stock, which follows its rapidly growing virtualization software unit VMware Inc., people said.
The terms of the agreement, which could still fall, could not be learned, but Dell plans to acquire the shares of DVMT at premium and the shareholders of DVMT should also receive several billion dollars in cash as part of the transaction.
Dell Technologies
Inc.,
The official name of the tracker, has a market capitalization of nearly $ 17 billion, while VMware is close to $ 60 billion, after that shares have increased this year of an agreement.
The move would result in a strategic review that Dell has been conducting for months. Other options considered include a combination with VMware itself or an initial public offering, the company said.
The tracking stock was created to help finance Dell's acquisition of the pioneering EMC storage in 2016. The cash deal, but the rest was paid via the new title related to a part of the participation of EMC in VMware business, which provides cloud infrastructure services.
The tracking stock issue meant that Dell did not have to raise as much money to finance the operation.
The traceability stock has almost doubled in value since its release, closing Friday at $ 84.58.
The transaction would be the latest in a series of major transactions that have transformed Dell over the past five years and have it laden with debts.
The company became private in connection with a leveraged buyout of about $ 25 billion in 2013 by its founder,
Michael Dell,
and the investment company Silver Lake.
When Dell concluded its $ 67 billion deal for EMC, the largest technology takeover ever, Dell employed approximately 140,000 people worldwide and had a $ 74 billion turnover. . It is today one of the largest private technology companies in the world
. Formerly the largest manufacturer of personal computers, Dell is now recognized for its products such as storage, servers and security software. He also joins the corporate market betting on the so-called Internet of Things, as the IT giant looks for new growth paths in a context of transitioning business spending to the cloud
The Round Rock, Texas, The company announced that it would spend $ 1 billion on research and development to create hardware and software that would help manage billions of devices connected daily to the Web.
Silver Lake, which holds a significant interest in Dell, has consistently supported the trading of its holding companies. In addition to Dell, he made it to
Broadcom
Ltd.
, who attempted a hostile takeover of
Qualcomm
Inc.
he was forced to abandon the lawsuit, and
Symantec
Corp.
, who bought a string of cybersecurity companies.
VMware, based in Palo Alto, California, produces software related to databases, storage and the Internet of Things. Dell has about 80% of VMware.
Write to Dana Cimilluca at [email protected] and Dana Mattioli at [email protected]
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