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US: Dell confirms possible IPO or merger with VMware

By  |  February 5, 2018

Computer maker Dell Technologies confirmed it is considering a public offering of common stock or a combination with business software maker VMware, its publicly held subsidiary.

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    Dell, the world’s largest privately held technology company, is under pressure to boost profitability after its debt-laden acquisition of data storage provider EMC for US$67 billion in 2016 failed to meet financial targets, hurt by intensifying price competition.

    Combining with VMware would provide access to VMWare’s US$11.6 billion in cash, helping Dell trim its US$52.5 billion debt pile. Last month’s US tax reform made servicing that debt more expensive due to caps on deducting interest expense.

    The combination would also make Dell a publicly listed company, offering a path for private equity firm Silver Lake to begin selling down its 18% stake if it chooses to. Silver Lake helped bankroll Dell CEO Michael Dell in taking the company private in 2013 in a US$24.9 billion leveraged buyout.

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