Michael Dell is ready to return his company to the public stock market, five years after taking it private with help from investment firm Silver Lake.
The New York Times reports that Dell could go public again as early as next week, in a complex $21.7 billion stock buyout deal it says will enable the company to make investments in its future with the founder and CEO firmly in control.
"Mr. Dell and Silver Lake are expected to announce as early as Monday that they have struck a $21.7 billion deal to buy out investors in a special class of shares created in 2016 to help Dell buy the networking company EMC," the Times explains. "That stock effectively tracks the performance of Dell’s 82 percent stake in VMware, the fast-growing network software company that Dell inherited when it bought EMC. (The other 18 percent of VMware is publicly traded as a different stock.)"
The boards of both companies have approved the deal, which would "simplify the stock structure of Dell and its publicly traded subsidiary," according to the Times. "But it would also mark the return of Dell to the public markets, with a twist: The special shares held by Mr. Dell and Silver Lake would give them more votes than other investors."
It's been a busy several years for few years for the company, since going private in 2013. Most notably, it acquired cloud computing giant EMC in 2016 in a $67 billion mega-deal, the largest technology acquisition in history.
With the merger, Dell gained, among other assets, EMC's healthcare data analytics division, whose clients included Partners HealthCare, St. Luke's Health System and University of Chicago Medicine.
"The last five years, a lot has changed," Michael Dell told CNBC yesterday. "We have completely transformed the business, become the essential infrastructure company and really changed the profile of the company in terms of our capabilities across the data center."
He noted, for instance, that 85 percent of Dell's engineers are now focused on software – notable, given that the company was a pure hardware vendor for the first 25 years of its existence.
Dell's rationale for going private was to give the company the latitude to reconfigure itself for the fast-evolving demands of the new technology landscape.
Much of that time has seen Dell EMC honing its offerings for the healthcare industry, developing software and cloud tools and partnering with companies to help hospitals manage population health, for instance, or focusing on the emerging possibilities of precision medicine.
Now, with an infusion of public cash to help finance more and bigger investments across its business, Dell EMC should be well-positioned to innovate on the four areas in this space it says are its top priorities: health IT, precision medicine, connected health and security transformation.
In a keynote interview two years ago at HIMSS16, Michael Dell made clear that he sees technology leading toward enormous innovations in healthcare and beyond.
"There’s something very big going on here," he said. "With the explosion in the number of devices and in the amount of data that is now available from those devices, the real challenge is, how do you use that data in real time to make the product or the services better. In healthcare, that takes the form of genomics and molecular diagnostics and immunotherapy and all sorts of new areas that are targeted therapies that are affecting patient outcomes."
The hurdle, he said – and as he's shown with his own company – was finding new ways to fund and finance all that new innovation.
"One of the big challenges is how do you create a funding mechanism for these new areas," said Dell. "The only answer we found is you’ve got to make the existing infrastructure more efficient to create a funding mechanism. It’s not easy in healthcare. I think you have to go back and look at the infrastructure – and squeeze cost out of the existing infrastructure to fund the future."
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