$24.9 billion buyout to revive ‘entrepreneurial spirit’ says founder and CEO

Dell to remain ‘committed to the PC business’ despite privatisation

Dell has said that it will reclaim its “entrepreneurial spirit” and remain committed to its PC business once it goes private.

Following the successful buyout of Dell by CEO and founder Michael Dell and investment firm Silver Lake Partners for $24.9 billion, Dell has said that the move will allow the company to make investments and acquisitions in order to expand into high-margin markets.

The deal, opposition to which was relinquished last week by Carl Icahn, was voted through by Dell shareholders on September 12th. It is predicted to close in Dell’s current quarter, which ends on November 1st, and will give Michael Dell a 75 per cent stake in the private company.

Speaking in a conference call, during which he didn’t take questions, Dell said that as well as recapturing the spirit of Dell’s past, the move would result in investments in consumer PCs and tablets.

"We will continue to make large investments in R&D in enterprise solutions and services," commented Brian Gladden, Dell’s Chief Financial Officer.

"What we’ve seen is that part of the market is growing faster. By no means is that a statement of our lack of commitment to the PC business."

"What you’ll see is really a focus on customers."

On the strategy, Forrester Research analyst David Johnson told ITWorld: "Software is going to form a much more important part of Dell’s business in the future."

"Dell is in a position right now to be able to blend a really good hardware business with good enterprise traction with a growing software business, and build new types of converged systems."

Johnson saw the privatisation as beneficial for Dell if the strategy pays off.

"Any time you can choose a single vendor and a very well-integrated technology stack, it’s going to be more efficient," he said.

Dell’s profits fell by almost 80 per cent earlier this year, largely attributed to a shrinking PC market, but Michael Dell’s previous offers to buyout the struggling company were criticised as “undervalued”.

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