Privately held computer technology corporation, Dell, has acquired EMC for $67 billion in what tech and financial press are calling the largest pure-play tech acquisition ever.
According to Bloomberg business, the deal is “the largest technology acquisition ever as Michael Dell looks to leverage EMC’s dominance in storage devices amid intensifying competition.”
To put this deal in perspective; Facebook bought Whatsapp for a whooping – well not so whooping anymore – $19 billion back in 2014. This blows that out of the water. It is also larger that the $37 billion that Avago paid for Broadcom back in May
But this gets more interesting. In this deal, Dell is the smaller fish at a $25 billion valuation. So it makes sense that Dell engaged multiple streams of financing to fund the acquisition.
In addition to new common equity from Michael Dell and MSD partners, the transaction will be financed by Silver Lake and Temasek, the issuance of tracking stock, as well as new debt financing and cash on hand.
EMC is the IT as a service company that is also the holding for VMware. According to EMC, VMware is included in the acquisition but will continue to be a separate entity traded publicly. However, the deal will end EMC’s history as a publicly traded company.
According to the terms of the deal, EMC stockholders will receive $24.05 per share in addition to tracking stock in VMware. Michael Dell will continue to lead Dell while Joe Tucci, EMC’s CEO will retire.