When it comes to the technology sector, besides maybe Google, Apple, IBM and Microsoft, few names are as recognizable as that of Dell. The company, founded some 31 years ago by Michael Dell, may have just agreed to what is the largest technology buyout in history.
The deal involving the buyout of EMC Corp, a Hopkinson, Massachusetts-based company with over 70,000 employees that specializes in data storage and information security, is said to be valued at approximately $67 billion.
Shares of EMC closed the day on Friday up 2.5% to $27.86. This deal will offer a total of $33.15 per share in a cash and a special stock to shareholders. This will equate to approximately $50 billion in cash, while shareholders in EMC will also receive a new stock which will track EMC’s economic interest in VMware Inc, a company that specializes in visualization software that’s majority-owned by EMC.
“We’re creating an unbelievable powerhouse of an enterprise company,” Dell Chairman and CEO Michael Dell told CNBC.” “This is really all about bringing together complementary technologies and helping our customers address the challenges and opportunities that this digital future is creating.”
If successfully closed, not only will this deal make Dell a Goliath within the data storage space, to go along with their PC and laptop business, but it will be by far the largest ever acquisition within the technology sector. Back in May of this year, Avago Technologies made a $37 billion acquisition offer for Broadcom, which is still in the process of closing, and at the time represented the largest tech deal ever.
It’s been almost two years since Michael Dell took the company he found private for approximately $25 billion, and there have not been many indications on whether the company is better off as a private entity or one that’s publicly traded. Either way, this deal clearly shows that Dell has a plan for growth in a PC market that’s continuing to shrink as tablets and smartphones take over.
It will been interesting to see if this deal eventually closes, and just how it plays into Dell’s business plan moving forward. Shares of EMC Corp are trading up 4.27% in the pre-market.