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IDG News Service - Michael Dell has teamed up with investment firm Silver Lake to buy computer maker Dell, the company he founded as a 19-year-old in 1984, in a deal valued at about US$24.4 billion.
After the transaction closes, Michael Dell will continue as CEO and chairman of the company, according to a statement.
[ OPINION: Microsoft has no reason to save Dell ]
"I believe this transaction will open an exciting new chapter for Dell, our customers and team members," Michael Dell said in the statement. "We can deliver immediate value to stockholders, while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise."
According to the statement, the deal is being financed through a combination of cash and equity contributed by Dell, cash from investors affiliated with Silver Lake, cash invested by MSD Capital, L.P., a $2 billion loan from Microsoft, rollover of existing debt and debt financing that's been committed by BofA Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets.
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Microsoft issued a statement saying that it is "committed to the long term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future. ... we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform."
Dell has been around in one form or another since 1984, when Michael Dell started a company called PC's Ltd. with $1,000 in his pocket. He changed the name to Dell and took the company public four years later.
Dell made its biggest mark in the 1990s, when its model of building PCs to order and shipping them directly to customers undercut rivals like Hewlett-Packard and IBM, which had complex supply chains and backlogs of inventory. In 2001 Dell became the top PC seller in the world.
Its fortunes didn't last, however. Dell's rivals adopted some of its low-cost production methods, while also expanding into other areas such as services and software. Dell stayed focussed on PCs and servers and eventually found itself left behind. In 2007, after a spell away from his CEO job, Michael Dell returned to try to right his listing ship.