In an attempt to raise funds and decrease its huge debt, U.S computer manufacturer Dell Technologies is considering taking the company public again. People familiar with the matter said the company board will be meeting by the end of the month to discuss the available options.
Michael Dell took his company private in 2013, while he teamed with Silver Lake on a leveraged buyout. The move released the company from their quarterly investor inspections, which happens with a public limited company. The company was able to cut costs and work toward becoming the biggest supplier of hardware and software for corporate data centers. Three years after this move, Dell acquired storage technology provider EMC Corp and its majority stake in data-center software vendor VMware, which led them to take on a huge debt of $67 billion. However, EMC was unsuccessful in delivering the cost savings and performance it projected, as higher component costs and a challenging data storage market battered its margins. Considering this downfall, an initial public offering would unravel one of the biggest leveraged buyouts the tech industry has ever seen.
Currently, Dell is appraising a list of several possible acquisition targets that would help with the cash flow and expand its offerings. The company has around $46 billion in debt, which includes about $3 billion of bonds maturing in 2018, and $4.35 billion due next year. Dell might also consider the sale of or release an IPO of Pivotal Software Inc, one its rapidly expanding division. The company might also reflect on a transaction with its majority-owned VMware Inc.
Dell was founded in 1984, by Michael Dell who was just a pre-med freshman at the time of the formation of the company. The company’s technology portfolio varies from servers, displays, workstations, and gaming PCs. They also have a security unit, RSA, and a cloud platform called Boomi.
In the last decade, due to the popularity of smart phones and tablets, company growth has been stagnant. Dell has also suffered fierce competition in the storage market, with Amazon.com Inc’s AWS and Microsoft Corp’s Azure.