![Business Wire](20130205_Dell-BusinessWire_files/image001.jpg)
February
05, 2013 09:20 AM Eastern Time
Dell Enters
into Agreement to Be Acquired by Michael Dell and Silver Lake
-
Dell stockholders to receive $13.65 per
share in cash
-
Transaction valued at approximately
$24.4 billion
-
Transaction implies a 37 percent
premium over the average closing share price during the previous 90
calendar days ending Jan. 11, 2013
ROUND ROCK, Texas--(BUSINESS
WIRE)--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.
|
“The
Special Committee and its advisors conducted a disciplined and
independent process intended to ensure the best outcome for
shareholders. Importantly, 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.” |
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.
The Dell Board of
Directors acting on the recommendation of a special committee of
independent directors unanimously approved a merger agreement under which
Michael Dell and Silver Lake Partners will acquire Dell and take the
company private subject to a number of conditions, including a vote of the
unaffiliated stockholders. Mr. Dell recused himself from all Board
discussions and from the Board vote regarding the transaction.
A Special
Committee was formed after Mr. Dell first approached Dell’s Board of
Directors in August 2012 with an interest in taking the company private.
Led by Lead Director Alex Mandl, the Special Committee retained
independent financial and legal advisors J.P. Morgan and Debevoise &
Plimpton LLP to advise the Special Committee with respect to its
consideration of strategic alternatives, the acquisition proposal and the
subsequent negotiation of the merger agreement.
The Special
Committee also engaged a leading management consulting firm to conduct an
independent analysis, including a review of strategic alternatives for
Dell and opportunities for the company as a public entity, and thereafter
engaged Evercore Partners.
The merger
agreement provides for a so-called “go-shop” period, during which the
Special Committee – with the assistance of Evercore Partners – will
actively solicit, receive, evaluate and potentially enter into
negotiations with parties that offer alternative proposals. The initial
go-shop period is 45 days. Following that period, the Special Committee
will be permitted to continue discussions and enter into or recommend a
transaction with any person or group that submitted a qualifying proposal
during the 45-day period. A successful competing bidder who makes a
qualifying proposal during the initial go-shop period would bear a $180
million (less than 1 percent) termination fee. For a competing bidder who
did not qualify during the initial go-shop period, the termination fee
would be $450 million.
Mr. Mandl, lead
director of Dell’s Board of Directors, said: “The Special Committee and
its advisors conducted a disciplined and independent process intended to
ensure the best outcome for shareholders. Importantly, 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.”
Mr. Dell said: “I
believe this transaction will open an exciting new chapter for Dell, our
customers and team members. 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 has made solid progress executing this strategy
over the past four years, but we recognize that it will still take more
time, investment and patience, and I believe our efforts will be better
supported by partnering with Silver Lake in our shared vision. I am
committed to this journey and I have put a substantial amount of my own
capital at risk together with Silver Lake, a world-class investor with an
outstanding reputation. We are committed to delivering an unmatched
customer experience and excited to pursue the path ahead.”
"Michael Dell is
a true visionary and one of the preeminent leaders of the global
technology industry," said Egon Durban, a Silver Lake Managing Partner.
"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."
Following
completion of the transaction, Mr. Dell, who owns approximately 14 percent
of Dell’s common shares, will continue to lead the company as Chairman and
Chief Executive Officer and will maintain a significant equity investment
in Dell by contributing his shares of Dell to the new company, as well as
making a substantial additional cash investment. Dell will continue to be
headquartered in Round Rock, Texas.
The transaction
will be financed through a combination of cash and equity contributed by
Mr. Dell, cash funded by investment funds affiliated with Silver Lake,
cash invested by MSD Capital, L.P., a $2 billion loan from Microsoft,
rollover of existing debt, as well as debt financing that has been
committed by BofA Merrill Lynch, Barclays, Credit Suisse and RBC Capital
Markets (in alphabetical order), and cash on hand. There is no financing
condition.
The transaction
is subject to other customary conditions, including receipt of required
regulatory approvals, in addition to the Dell stockholder approvals
described above. The transaction is expected to close before the end of
the second quarter of Dell’s FY2014.
For further
information regarding all terms and conditions contained in the definitive
merger agreement, please see Dell’s Current Report on Form 8-K, which will
be filed in connection with this transaction.
J.P. Morgan and
Evercore Partners are acting as financial advisors and Debevoise &
Plimpton LLP is acting as legal advisor to the Special Committee of Dell’s
Board of Directors. Goldman, Sachs & Co. is acting as financial advisor
and Hogan Lovells US LLP is acting as legal advisor to Dell. Wachtell,
Lipton, Rosen & Katz is acting as legal advisor to Mr. Dell. BofA Merrill
Lynch, Barclays, Credit Suisse and RBC Capital Markets (in alphabetical
order) are acting as financial advisors to Silver Lake, and Simpson
Thacher & Bartlett LLP is acting as legal advisor to Silver Lake.
About Dell
Dell Inc.
(NASDAQ: DELL) listens to customers and delivers worldwide innovative
technology, business solutions and services they trust and value. For more
information, visit
www.Dell.com. You may follow the Dell Investor Relations Twitter
account at:
http://twitter.com/Dellshares. To communicate directly with Dell, go
to
www.Dell.com/Dellshares.
About Silver
Lake
Silver Lake is
the global leader in private investments in technology and
technology-enabled industries. Silver Lake invests with the strategic and
operational insights of an experienced industry participant. The firm has
over 100 investment professionals and value creation specialists located
in New York, Menlo Park, San Francisco, London, Hong Kong, Shanghai and
Tokyo and manages approximately $14 billion. The Silver Lake portfolio
includes or has included technology industry leaders such as Alibaba,
Allyes, Ameritrade, Avago, Avaya, Business Objects, Flextronics, Gartner,
Gerson Lehrman Group, Groupon, Instinet, Intelsat, Interactive Data
Corporation, IPC Systems, MCI, Mercury Payment Systems, MultiPlan, the
NASDAQ OMX Group, NetScout, NXP, Sabre, Seagate Technology, Serena
Software, Skype, Spreadtrum, SunGard Data Systems, UGS, Vantage Data
Centers and Zynga. For more information about Silver Lake and its entire
portfolio, please visit
www.silverlake.com.
Forward-looking Statements
Any statements in
this press release about prospective performance and plans for the
Company, the expected timing of the completion of the proposed merger and
the ability to complete the proposed merger, and other statements
containing the words “estimates,” “believes,” “anticipates,” “plans,”
“expects,” “will,” and similar expressions, other than historical facts,
constitute forward-looking statements within the meaning of the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Factors or risks that could cause our actual results to differ materially
from the results we anticipate include, but are not limited to: (1) the
occurrence of any event, change or other circumstances that could give
rise to the termination of the merger agreement; (2) the inability to
complete the proposed merger due to the failure to obtain stockholder
approval for the proposed merger or the failure to satisfy other
conditions to completion of the proposed merger, including that a
governmental entity may prohibit, delay or refuse to grant approval for
the consummation of the transaction; (3) the failure to obtain the
necessary financing arrangements set forth in the debt and equity
commitment letters delivered pursuant to the merger agreement; (4) risks
related to disruption of management’s attention from the Company’s ongoing
business operations due to the transaction; and (5) the effect of the
announcement of the proposed merger on the Company’s relationships with
its customers, operating results and business generally.
Actual results
may differ materially from those indicated by such forward-looking
statements. In addition, the forward-looking statements included in this
press release represent our views as of the date hereof. We anticipate
that subsequent events and developments will cause our views to change.
However, while we may elect to update these forward-looking statements at
some point in the future, we specifically disclaim any obligation to do
so. These forward-looking statements should not be relied upon as
representing our views as of any date subsequent to the date hereof.
Additional factors that may cause results to differ materially from those
described in the forward-looking statements are set forth in the Company’s
Annual Report on Form 10−K for the fiscal year ended February 3, 2012,
which was filed with the SEC on March 13, 2012, under the heading “Item
1A—Risk Factors,” and in subsequent reports on Forms 10−Q and 8−K filed
with the SEC by the Company.
Additional
Information and Where to Find It
In connection
with the proposed merger transaction, the Company will file with the SEC
and furnish to the Company’s stockholders a proxy statement and other
relevant documents. This press release does not constitute a solicitation
of any vote or approval. Stockholders are urged to read the proxy
statement when it becomes available and any other documents to be filed
with the SEC in connection with the proposed merger or incorporated by
reference in the proxy statement because they will contain important
information about the proposed merger.
Investors will be
able to obtain a free copy of documents filed with the SEC at the SEC’s
website at
http://www.sec.gov. In addition, investors may obtain a free copy of
the Company’s filings with the SEC from the Company’s website at
http://content.dell.com/us/en/corp/investor-financial-reporting.aspx
or by directing a request to: Dell Inc. One Dell Way, Round Rock, Texas
78682, Attn: Investor Relations, (512) 728-7800,
investor_relations@dell.com.
The directors,
executive officers and certain other members of management and employees
of the Company may be deemed “participants” in the solicitation of proxies
from stockholders of the Company in favor of the proposed merger.
Information regarding the persons who may, under the rules of the SEC, be
considered participants in the solicitation of the stockholders of the
Company in connection with the proposed merger will be set forth in the
proxy statement and the other relevant documents to be filed with the SEC.
You can find information about the Company’s executive officers and
directors in its Annual Report on Form 10-K for the fiscal year ended
February 3, 2012 and in its definitive proxy statement filed with the SEC
on Schedule 14A on May 24, 2012.
Contacts
Media Contacts: 512-728-4100
or
Dell
David Frink, 512-728-2678
david_frink@Dell.com
or
Jess Blackburn, 512-728-8295
jess_blackburn@Dell.com
Investor Relations Contacts:
or
Robert Williams, 512-728-7570
robert_williams@Dell.com
or
David Mehok, 512-728-4225
david_mehok@Dell.com
or
Kekst & Co. Contact
Kekst & Co.
Todd Fogarty, 212-521-4854
todd-fogarty@kekst.com |