|By PR Newswire||
|January 16, 2013 08:01 AM EST||
NEW YORK, January 16, 2013 /PRNewswire/ --
After dismal sales due to decline in PC demand and rising tablet sales, the third largest PC seller DELL looks into going private in a $19 billion buyout, the largest deal since the recession.
At least four major banks have already lined up to provide financing for Dell Inc.'s (NASDAQ: DELL) [Full Research Report](1) plan to go private, skyrocketing Dell's stock as high as 13 percent. Buyout firm and deal leader Silver Lake Partners has tapped the services of Credit Suisse (CS), Bank of America Merrill Lynch, Barclays, and Royal Bank of Canada (RBC) to finance the deal.
For additional due diligence beyond the scope of this article, read our full featured research report on Dell Inc. including full detailed breakdown, technical analysis, analyst ratings and price targets - absolutely free of charge - available at: [http://www.nationaltradersassociation.org/r/read_report/d446_DELL].
The plan to go private came after dismal revenues and profits posted in Q3 of fiscal year 2013 despite raking in $13.7 billion in revenues. The number is down from Q2's $14.5 billion and the $15.5 billion posted in the same period last year. That also meant a net income of just $475 million for the quarter, a whopping 47 percent drop from last year's $893 million.
But while its Enterprise Solutions division has been one of the few bright spots - posting three percent growth year-over-year - it may not be enough to make up for the huge losses in its consumer division, which is at $65 million for the quarter.
One large factor was the overall decline in total PC sales during the holiday season, according to research firm IDC. Shipments were down 6.4 percent at 89.8 million units in the fourth quarter of 2012 compared to the previous year, surpassing the predicted decline of only 4.4 percent.
Another is the aggressive push of Asian competitors like Taiwan's Acer and China's Lenovo (LNVGY), with the latter now the biggest seller of PCs after leapfrogging Hewlett-Packard into first place and pushing Dell to third place.
Ironically, these Asian manufacturers learned the same business model that Dell itself pioneered. The model is based on extremely efficient supply chain that helps keep the prices low. Unfortunately for the American firm, the Asians managed to beat it in its own game.
Since assuming Dell Inc.'s chief executive post in 2007, Michael Dell tried to revive his company's fortunes by diversifying revenues, spending billions of dollars on cloud computing and storage businesses. He also made acquisitions in an attempt to sell more products to businesses due to consumers shunning PCs in favor of tablets and smartphones.
Going private can accelerate reviving growth and help cope with the competition without constant scrutiny from public shareholders, according to a report from Bloomberg. "[Michael Dell] wants to de-emphasize about two-thirds of his business, and that's a hard strategy to push because it would mean overall revenue will shrink," an analyst told Bloomberg.
However, previously failed deals involving large leverage buyouts like Dell have been scarce since the recession. Other tech companies like disk drive maker Seagate Technology Plc. (STX) have tried going private recently only to fall through over valuations and financial concerns.
(1)The Full Research Report on Dell, Inc. - including full detailed breakdown, analyst ratings and price targets - is available to download free of charge at: [http://www.nationaltradersassociation.org/r/entire_report/d446_DELL]
Consider National Traders Association
Tired of hearing about the latest, greatest trade opportunity... only to realize that the ship has long sailed? You need a strong, informative community in your arsenal. Join the group that has been consistently identifying momentous situations as they develop -- long before they become the next top news on major financial networks.
SOURCE National Traders Association
- Mainstream Business Applications and In-Memory Databases
- Findly Enhances Recruiting Efficiency With New Single Sign-on Portal
- Ukraine Has Potential in Midst of Chaos
- “Entisys 02” Finishes in Top 20 at the 2014 NASCAR K&N Pro Series West Race at the Sonoma Raceway
- Complete Surface Pro 3 Review - 3 days later
- Flexera Software Increases Commitment to Europe with Germany-based Datacenter to Host FlexNet Manager Suite Cloud for European Customers
- June 2014 Server and StorageIO Update newsletter
- CORRECTING and REPLACING Android and the Open Automotive Alliance Shift into the Next Gear
- Research and Markets: Global Industrial Control Systems (ICS) Security Market 2014-2018 with Cisco, Fortinet, General Dynamics, Juniper Networks, McAfee, Raytheon & Symantec Dominating
- MongoDB World in NY City this week
- Is Business Transformation a Dirty Word(s)?
- Book Review: Learning Mobile App Development
- Mainstream Business Applications and In-Memory Databases
- The Odd Couple: Marrying Agile and Waterfall
- FlexNet Manager Suite Wins CODiE Award for Best Asset Management Solution - 4th CODiE Award for Flexera Software
- Fanning the Flames of Agile
- Big Data, Cloud and Mobile - Converging Technology Trends
- April and May 2014 Server and StorageIO Update newsletter
- WSO2 Introduces Industry’s First Enterprise Identity Bus With the Launch of WSO2 Identity Server 5.0
- Big Data Expo 2014 Silicon Valley Call for Papers Now Open
- Jim Miller at ImageWare Systems, George Romas at HP, Jody Ross at AMAG, + March Networks and StrikeForce Featured in SecuritySolutionsWatch.com Interviews
- The Butterfly Effect Within IT
- Microsoft SharePoint at a Crossroads – Opportunities & Challenges Abound
- The Linux Foundation's Core Infrastructure Initiative Announces New Backers, First Projects to Receive Support and Advisory Board Members
- Google Maps and ASP.NET
- Converting VB6 to VB.NET, Part I
- How to Write High-Performance C# Code
- Where Are RIA Technologies Headed in 2008?
- Crystal Reports XI & How It Has Changed
- Creating Controls for.NET Compact Framework in Visual Studio 2005
- Programmatically Posting Data to ASP .NET Web Applications
- Implementing Tab Navigation with ASP.NET 2.0
- AJAX World RIA Conference & Expo Kicks Off in New York City
- The Top 250 Players in the Cloud Computing Ecosystem
- i-Technology Viewpoint: "SOA Sucks"
- .NET Archives: Getting Reacquainted with the Father of C#