After a quarter century as a public company, Dell will go private again.
Dell's shareholders approved a proposal from co-founder Michael Dell and Silver Lake Management to buy out the company for $24.9 billion and take it private. The decision caps off more than a year of back-and-forth negotiations on a possible deal.
See also: Michael Dell Lays Out Plan to Save His Company
“I am pleased with this outcome and am energized to continue building Dell into the industry’s leading provider of scalable, end-to-end technology solutions,” Mr. Dell said in a statement after the vote. “As a private enterprise, with a strong private-equity partner, we’ll serve our customers with a single-minded purpose and drive the innovations that will help them achieve their goals.”
In February, Dell announced the founder's proposal to pay shareholders $13.65 a share, or $24.4 billion, to take the company private, with financing from Silver Lake. That proposal encountered opposition from Carl Icahn, a billionaire activist shareholder, who argued the company was worth more. Mr. Dell eventually raised his offer in August to $13.75 a share, calling it his "best and final offer."
Earlier this week, Icahn formally dropped his bid to block Dell's buyout offer, effectively removing the last major roadblock to taking Dell private.
Mr. Dell has previously said that Dell can only survive the declines in the overall PC market if it makes a quick transition to focusing on enterprise and services. To do so, he argued, will require significant investments and likely a decrease in the company's gross margins, which would likely hurt the stock.
"A continuing decline in the public share price would threaten to adversely affect customer perception and make it more difficult to retain employees," Mr. Dell wrote in the presentation filed with the SEC in June. The hope is that taking the company will eliminate that problem and give the company the flexibility it needs to survive.
The deal is expected to close by the end of the third quarter in Dell's 2014 fiscal year.
Image: Justin Sullivan/Getty