PC-maker Dell to go private

February 5, 2013 in Medical Technology

PC-maker Dell, which in recent years made several plays in the health IT market, plans to go private. Dell founder, chairman and CEO Michael Dell and investment firm Silver Lake will spend $24.4 billion to acquire the company Dell founded in his dorm room in 1984.

Dell has made several acquisitions in health IT space over the years – Perot Systems, Quest Software and InSite One, among them – and forged partnerships with electronic health records vendors such as NextGen and Greenway. Maine’s health information exchange, HealthInfoNet, tapped Dell to build its medical image archive.

[See also: Dell to acquire Perot Systems.]

Michael Dell announced the move to go private today.

“I believe this transaction will open an exciting new chapter for Dell, our customers and team members,” said Dell said in a statement. “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 added that the company “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.”

Under the terms of the agreement, Dell stockholders will receive $13.65 in cash for each share of Dell common stock they hold. That price is a 37 percent premium over the average closing share price during the previous 90 calendar days ending Jan. 11, 2013.

[See also: Dell to acquire Quest Software for $2.4B.]

The transaction will be financed through a combination of cash and equity contributed by 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.

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.

Following completion of the transaction, Dell, who owns approximately 14 percent of Dell’s common shares, will continue to lead the company as chairman and CEO 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.

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Article source: http://www.healthcareitnews.com/news/pc-maker-dell-go-private

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