Business & Tech

Dell is going public again

Paul Sakuma/Associated Press/File

Michael Dell, whose move to take his computing firm private five years ago helped him cook up the massive acquisition of Massachusetts-based EMC, has decided to go public again.

Dell Technologies announced Monday that it has resolved after a months-long deliberation to again offer its shares to public market investors. Michael Dell, who has long criticized the short-term focus of the stock market, now believes the arrangement will allow him to build his company the way he wants.

“We don’t anticipate any changes,” Dell said during a conference call with analysts. “If you look at the last five years, we’ve been consistently investing for growth, and it’s been working.”


Dell said early this year that it has about 8,700 employees in Massachusetts.

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The company is not planning to raise money with its return to public markets, nor are major investors seeking to cash out — at least not right away. Instead, the deal is largely targeted toward simplifying a complicated corporate structure that emerged from Dell’s 2016 purchase of the data storage giant EMC for $60 billion, the company said.

Dell is taking a nontraditional route to the public markets, eschewing an initial public offering in favor of the conversion of a “tracking stock” that the company already has listed on the New York Stock Exchange.

That stock was created as a way to compensate EMC shareholders. EMC at the time owned the majority of VMware, a separate tech company, and the stock was created to represent the combined company’s holdings in VMware. Shareholders of EMC got shares of the tracking stock as part of Dell’s payment for Hopkinton-based EMC.

The investment firm Silver Lake and Michael Dell took Dell Technologies private in 2013 as the company struggled, seeking a freer range of movement that comes with more distance from Wall Street and investors.


Dell, like all PC makers, was hit hard as people shifted from laptops to tablets and other mobile devices. While private, Dell strengthened its financial position, posting with revenue growth of 19 percent in its most recent quarter.

It’s still losing money, half a billion in that same period, but those losses are shrinking. The company said it has also been making progress in paying down the nearly $49 billion debt it had at the end of the EMC transaction.

Michael Dell, who owns 72 percent of the company’s common shares, will remain as chairman and CEO and will control 47 to 54 percent of the company following the deal. Silver Lake, which owns 24 percent, will own between 16 and 18 percent.

The deal will need the approval of shareholders who own the tracking stock. The company is offering them $109 in cash for each share they hold, or 1.3665 shares of the new Dell stock, which will list on the NYSE.

Meanwhile, VMware will issue an $11 billion dividend, with $9 billion going to Dell.


Patrick Moorhead, who follows Dell as principal analyst at Moor Insights & Strategy, said the arrangement is not likely to change much about the company’s operation. Dell had been looking at other, more complicated arrangements including an IPO or a full acquisition of VMware.

The deal, which is expected to close in the fourth quarter of this year, will give Dell access to public markets in a way it hasn’t had for years, which means it could choose to raise additional money to more quickly pay off debt or give Silver Lake a chance to cash out.

Moorhead said the company’s public status will open it up to more scrutiny. But as long as Silver Lake and Michael Dell remain in agreement about the direction of the company, he said, they will control their own destiny.

He said public markets would probably not have approved of a dramatic move like the EMC deal. Now that it’s complete, though, Moorhead does not believe Dell would have gone public again unless it had been a success.

“Dell is such a conservative company. If they didn’t think they had figured out the recipe for [working with] EMC together on storage, I can’t imagine they’d ever do this.”

Shares of the DVMT tracking stock were up 9 percent Monday, to $92.20. VMware shares were up more than 10 percent, to $162.02.

Material from the Associated Press was used in this report. Andy Rosen can be reached at