Who Will Buy Dell Computers? Microsoft and KKR in the Works
Who is Going to Buy Dell Computers?
About Dell Computers• Dell Inc. is a computer company based out of Round Rock, Texas and was founded by Michael Dell.• It develops, repairs, sells, and supports computers and other related products.• Currently it has over 103,000 employees around the world.• It is the third largest PC computer vendor.• While Dell is mainly known for computers, it also sells HDTVs, printers, cameras, and MP3 players which are built by other manufactures.
The History of Dell• Michael Dell started PCs Limited while he was still a student at the University of Texas at Austin. This business was run out of his dorm-room and sold IBM PC- compatible computers built from stock components.• After this became successful, Dell dropped out of school in order to focus on this business full time. He was able to do this due to a $300,000 expansion capital from his family.• The “Turbo PC” was developed by Dell in 1985, and sold for $795.• After this took off, Dell Inc. made more than $73 million in its first year.
Who Will buy Dell?• On January 14, 2013 it was reported that Dell Inc. was in the talks with private equity firms over a buyout.• No one knows the exact details, but we expect to hear more once a buyer is in place.• The buyout deal is expected to be over $20 billion, but might not all come from the same place.
KKR to Buy Dell?• It was reported January 16, 2013 that KKR is in talks about buying Dell, but have made no actual commitment.• One of the reasons KKR is considering the buyout is because of the company’s franchise value, it’s strong cash flow, as well as the growth it is seeing in some areas.
Microsoft in Talks of Bidding on Dell?• Even more surprisingly, Microsoft is considering bidding on Dell as well. If this happens, it is expected to contribute a couple billion dollars.• According to DealBook, “A vibrant Dell is an important part of Microsoft’s plans to make Windows more relevant for the tablet era, when more and more devices come with touch screens. “
Conclusion• No deals have been made yet, so keep your tabs on the news to see which companies will actually make a bid.• If Microsoft does make a bid, it will be interesting to see what they do with it.• For more information, check out:• DealBook Article about Microsoft.• Deal Journal Article about KKR.