Dell Inc. said Tuesday that federal regulators have signed off on the company’s $24.9 billion buyout deal, clearing one of the last remaining barriers on the Round Rock computer maker’s path toward becoming a private company.
The buyout offer, led by company founder and CEO Michael Dell and his financial partner Silver Lake Partners, has received “all necessary pre-merger regulatory clearances,” Dell Inc. said in a news release.
Company spokesman David Frink said Dell Inc. is “on track to complete the transaction before the end of our fiscal (third quarter), as process-related activities are completed.”
That means the buyout would be completed by Nov. 1.
“It’s a done deal,” said technology analyst Roger Kay with Endpoint Technologies Associates. “This is it.”
Kay said the approval process was a “no-brainer” since taking the company private didn’t include any combination of businesses.
“It’s not like Dell and HP merged, or something like that,” he said.
After a lengthy battle, Dell Inc. shareholders overwhelmingly voted in September to accept the Michael Dell-led buyout. The approval came after months of opposition led by billionaire investor Carl Icahn.
Icahn engaged in a campaign against the buyout, criticizing both Dell Inc.’s board and Michael Dell’s ability as a leader. For part of the summer, Icahn tried to rally enough opposition to threaten the deal. But Michael Dell and Silver Lake sweetened their offer and negotiated with the board to change the voting rules to ease the approval process. The final deal was for $13.75 per share, plus a 13-cent special dividend.
When the deal is completed, it is expected to end Dell Inc.’s 25-year run as a public company. The company was founded in 1984 when Michael Dell was still a student at the University of Texas at Austin.
Dell Inc. has grown into the world’s third-largest maker of personal computing and the third-largest maker of servers, the workhorse machines that run the Internet. It is the largest private employer in Central Texas, with about 14,000 workers in the Austin area.
While the company moves toward conclusion of the buyout, some signs of change are showing up. Dell Inc. is expected to unveil a new family of tablet computers this month, which are expected to supplement the company’s traditional line of desktop and mobile personal computers.
Kay said he expects that Dell Inc. will now focus on assessing its existing businesses, investing in the ones it wants to grow and possibly selling others. The company may also acquire some smaller software firms to fill out its enterprise portfolio.
But all in all, there will be lot less attention on Dell Inc. — which is what the company wants, Kay said. Now that the regulatory hurdles are cleared, the company can get to work transforming itself, he said.
“The various hurdles now are actually running the business,” he said.