Five years after computer maker and data company Dell went private, it returned to the public markets, but not by way of an initial public offering.
The owner of VMWare made its debut as a public company via a $24 billion cash and equity deal in which it acquired the pre-existing stock held by shareholders under the DVMT ticker, which tracked the company’s interest in VMWare. Dell now trades on the New York Stock Exchange under DELL. Since Dell’s debut on Dec. 28 at $45.69 a share, the stock has stayed largely flat, inching up to $46 during January trading.
Under the terms of the deal, Dell Technologies paid $14 billion in cash and issued 149,387,617 shares of its Class C common stock. It amounted to $120 a share in cash or 1.8066 shares of Class C common stock. Dell noted that 91.2% of shareholders in DVMT elected to receive cash, with the remainder opting for stock in the newly public enterprise.
"Our world is undergoing a digital transformation that will change every aspect of how we live, work and operate as a society," said Michael Dell, chairman, and CEO of Dell Technologies in late December when announcing the deal. "Dell Technologies was created to be the essential infrastructure company for this digital era, and with today's announcement, we are aligning the interests of our stakeholders to benefit from the integrated innovations and value creation from across our entire family of businesses."
Back in 2013, Michael Dell, who founded the computer company out of his college dorm room, along with private equity firm Silver Lake Partners, took Dell private in a $25 billion leveraged buyout. At the time, Silver Lake’s investment totaled $2.4 billion. The PE firm didn’t sell any of its 137 million shares in the company in the latest transaction, with the stake now valued at more than $6 billion.
The return to the public markets wasn’t without controversy for the computer and data storage company. Shareholders in the tracking stock, including activist investor Carl Icahn, were vocally opposed to the deal. Ironically, Icahn was also one of the shareholders that fought Dell when it went private five years ago. In November, Icahn told the Wall Street Journal that he would try to block the transaction and launched a lawsuit to meet that end. But sweetened terms by Dell prompted Icahn to withdraw the fight and lawsuit, resulting in Dell’s return as a public company.