Seven Firms Advise $24.4 Billion Deal to Take Computer Maker Private
In the largest private equity buyout since the 2007 financial crisis, computer maker Dell Inc. has announced it will be sold to a group led by the firm's founder, Michael Dell, and private equity firm Silver Lake. The transaction will be worth $24.4 billion once completed.
Silver Lake, which focuses on technology, has agreed to pay Dell shareholders $13.65 in cash for each share of the company's stock.
The plan to take Texas-based Dell private will be financed through a mix of cash and equity contributed by Michael Dell, cash from Silver Lake's affiliated investment funds, cash from an investment fund affiliated by MSDC Management, rollover of existing debt, and other debt financing. Microsoft, Dell's longtime business partner, will provide a $2 billion loan to Dell and Silver Lake.
Michael Dell will contribute his 14 percent stake in the company to the purchase in addition to a "substantial" cash investment, according to the firm. Under the agreement terms, he will retain his position as chairman and CEO.
Dell's board of directors unanimously approved the agreement following the recommendation of a special committee of independent directors.
The agreement also includes a 45-day "go-shop" period during which the special committee may seek alternative bids. A successful competing bid would be required to pay a $180 million termination fee to Michael Dell and Silver Lake. If a competing deal is struck after the 45-day window, the termination fee is $450 million. Evercore Partners is overseeing the go-shop period.
The transaction is expected to close before the second quarter of Dell's 2014 fiscal year, pending approvals by regulators and Dell shareholders.
Dell is being advised by Hogan Lovells on the deal, while Wachtell, Lipton, Rosen & Katz is representing the firm's namesake CEO. Simpson, Thacher & Bartlett represents Silver Lake.
Hogan Lovells' team is led by securities partners Richard Parrino in Washington and Kevin Greenslade in Northern Virginia. New York lawyers were partner Peter Humphreys, and associates Evan Kelson and David Cohn, finance. Lawyers in Washington and Northern Virginia were partner Joseph Connolly, Jr., and associate Todd Aman, securities; partners Bruce Gilchrist and Eve Howard, finance; partner Margaret de Lisser, employee benefits; partners Carine Stoick and Brent Singley, counsel Miyun Sung, and associates Clyde Crane, Gabrielle Witt, Theresa Nagy, Michael Belby, Brandon Egren and Tyler Kirtley, corporate; partner Todd Overman, government contracts; and associates Nicholas Nugent and Adam Aft, intellectual property. European labor partner Dominique Mendy in Paris also assisted.
The New York team from Wachtell Lipton advising Michael Dell is led by corporate partners Martin Lipton and Steven Rosenblum, and includes partners Andrew Nussbaum and Gordon Moodie, and associates Victor Goldfeld, Kendall Fox, and Sara Lewis, corporate; partner Joseph Larson, antitrust; partner Michael Segal, executive compensation and benefits; partners John Savarese and William Savitt, litigation; partner Joshua Feltman and associate Gregory Pessin, restructuring and finance; and partner T. Eiko Stange and associate Tijana Dvornic, tax.
Simpson Thacher's group is led by Palo Alto M&A partners Richard Capelouto and Chad Skinner. Lawyers in New York include partners Michael Nathan and John Lobrano, capital markets; partner Jennifer Hobbs and associates Adam Shapiro and Seth Niedermayer, credit; partner Laura Palma, structured finance; partner John Creed, tax; partner Joseph Tringali and senior counsel Michael Naughton, antitrust; associates Mindy Lok, Jodie Sopher Pimentel and Samantha Himelman, intellectual property; senior counsel Michael Isby, environmental; counsel Krista McManus, real estate; and partner Stacie McGinn, regulatory. Palo Alto lawyers are partner William Brentani and associate Alexis Orenstein, capital markets; associates Atif Azher, M. Nicholas Washburn, Kate Edwards, Jonathan Amt, Brian Osimiri, Erica Wilson, Dena Acevedo, David Ray and Alex Coffin, M&A; partner Katharine Moir and associate Jason Vollbracht, tax; partner Tristan Brown and associates Jennifer Wolff and Grace Wirth, employee benefits; and partner Jeffrey Ostrow, counsel Joshua Walker, and associates Michael Hasper, Roxana Niktab, Emiko Kurotsu and Michelle Lyon, intellectual property. Antitrust associates David Shogren in Washington and Jane Lee in London also worked on the deal.
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