Michael Dell drops $25 Billion to take his company private again


So it finally happened. Michael Dell was able to convince shareholders to accept his $25 Billion (US) offer to buy Dell Inc. This ends months of speculation and conflict among investors and industry experts each providing their own opinions and analysis about the potential privatization. Here is my article back in January from when it was first rumored.

August 2, Michael Dell raised his offer price. He also added a special dividend to shareholders to help sweeten the pot. A meeting took place in Austin Texas and based on early/preliminary results the buyout was approved. “I am pleased with this outcome and am energized to continue building Dell into the industry’s leading provider of scalable, end-to-end technology solutions,” Michael Dell said after the vote.

As I have stated in the past, I was never really fond of Dell’s Corporate ability to win in the converged infrastructure and services market. Did Dell even have a TS business? Although they have done very well in the PC and Server business, acquisition is the only way the company really grew their innovation and market footprint. Their server technology was neck and neck with the leaders like HP and IBM, and price was often their best way of winning. From what I gather their sales model is not streamlined and their sales team lacks the solution based selling knowledge which needs to be at the forefront in today “Cloud World”.

Michael Dell remains a very admirable businessman in my opinion. Nothing really bad can be said about a man who was a billionaire at 34 years of age. This is the reason why think taking Dell out of the public eye, could possibly help his chances of turning this company around and focusing on higher margin areas of IT and making the company more profitable in the long run.

Wishing Michael Dell and his team the best of luck. They will need it as the markets gets fiercer on a daily basis. The biggest question remains: Will Dell the Private Company be more profitable then Dell the Public Company?

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