As part of its proposed $US24.4 billion take-private deal, Dell has sent messages to employees and customers about what the deal means for supplier agreements and employment, regulatory documents filed in the US show.
For suppliers, Dell said it will continue to honour its supplier agreements, terms and commitments, according to the filings, which emphasised that Dell continues to have solid cash flow and balance sheet, a strong management team and a globally-recognized brand.
In a message to employees, its FY14 business plan remains unchanged, and its employees will still work for the same company and managers with the same customers. Once the deal closes, Michael Dell will remain chairman and CEO, according to the regulatory documents.
Dell’s customers can continue to expect “superior solutions services and experience” and partners can expect to continue to provide superior value to them, according to the documents.
“Many of our most important priorities and initiatives will remain intact and, in some cases accelerate, including: the new Dell business model, our Solution Group structure and our productivity and efficiency program targeting $US2 billion in opportunity across the company,” according to the message to employees.
“The proposed transaction will enable us to accelerate our long-term growth plan and transformation, and maintain our focus on helping customers achieve their goals,” it added. It also said the company does not anticipate job cuts as a result of the proposed deal. The deal is expected to enable it to accelerate its long-term growth plan and transformation.
In the messages, the company said that the new debt required for the transaction “does not result in a restrictively leveraged capital structure,” meaning the company will not be heavily burdened by debt.
The cost of servicing the debt in the proposed structure over the next three years is projected to be about the same or slightly less than Dell’s dividend and share repurchase costs over the past three years, according to the filing.
Michael Dell has teamed up with technology-focused private equity firm Silver Lake to take private Dell in a deal valued at about $US24.4 billion.
Under the terms of the go-private deal, Dell stockholders will receive $US13.65 in cash for each share of Dell common stock. The price represents a 25 per cent premium over Dell’s closing share price of $US10.88 on Jan. 11, 2013, the last trading day before rumours of a possible going-private transaction first hit the press.
A message from Michael Dell said the private ownership structure will allow the company the time and flexibility to pursue its long-term strategy, according to the filing.
“Under a new, private company structure, we will have the time and flexibility to fully pursue and realize our end-to-end solutions strategy and pursue organic and inorganic investment, without the scrutiny associated with a publicly traded stock, quarterly targets, and other limitations of operating as a public company,” he said.
“Dell is a relatively young company and I’m a [relatively] young CEO. I am eager to continue to serve as chairman and CEO, and excited to work with our existing senior leadership team. There is much more we can accomplish together and I am committed to this journey and our long-term strategy.”