Stefan Mileschin

Dell's shareholders on Tuesday voted to make the company public after five years of being a private company. The decision is expected to simplify the raising capital and to allow Dell to pursue stock-based acquisitions, which in turn will help the company to grow further by gaining IP and expertise it needs. In addition, by going public Dell is going to gain mid and long-term institutional investors, reducing pressure on the management. Dell’s shares will return to New York Stock Exchange in late December.
A $23.9 Billion Deal

In a bid to become a public company, Dell needs to unify all of its assets first. To do so, the company needs to acquire all of the tracking stock of subsidiary VMWare (DVMT), a company that it controls following the acquisition of EMC in 2015. On Tuesday the majority of investors voted for the deal, under which Dell will acquire the stock at $120 per share. The transaction will cost Dell $23.9 billion, which will be paid in cash and Dell stock. The cash part will be financed by Dell and a special dividend by VMWare. To a large degree, Dell will essentially need to buy back stock of the subsidiary it controls. In turn, this will allow Dell to become a publicly traded company without an IPO because VMWare is essentially a public trading company.

There is a rationale behind Dell’s moves. In 2013 in a bid to transform itself from a PC maker to a large high-tech company akin to IBM or HP, the company went private in order to break free from conservative institutional investors who are first and foremost focused on the balance sheet. This gave Dell the freedom it needed to reorganize internally and purchase the necessary outside talent and firms.

After the acquisition of EMC and VMWare, Dell became a leading supplier of PCs, servers, storage, software, cloud services, and so on. This has changed Dell's position in the market substantially, and the company's hope is that with its new busienss focus, traditional long-term investors will now consider Dell differently than back in 2013. This despite its $52.7 billion debt leftover from its acquisition of EMC for $67 billion three years ago. Meanwhile, the company still needs money to acquire smaller players to stay relevant in the long term.

https://www.anandtech.com/show/13710...-company-again