Dell weighing up options including a possible IPO

26 Jan 2018

Dell logo on the roof of Amsterdam office. Image: JPstock/Shutterstock

US computer manufacturer Dell is exploring a range of business options, including going public.

Dell is considering its options as it seeks to raise money and boost flagging revenue, according to Bloomberg.

The company board is to meet later this month to examine the available possibilities, private sources said.

A return to public trading?

In 2013, founder and CEO Michael Dell took the company private in partnership with private equity firm Silver Lake Management on a leveraged buyout.

At the time, the deal was worth $25bn and the buyout allowed the PC-maker to implement some cost-cutting measures and avoid the intense media scrutiny that came with being a public company.

Dell then purchased data storage firm EMC for $67bn in 2013, with a view to transforming itself into a major tech player and entering the corporate data storage and management space.

The review is currently in its infancy and there is no real certainty as to which path Dell may take.

The Financial Times reported that, if an IPO is chosen, the company will likely pursue a direct listing or a full merger with virtualisation software maker VMware, in which it already has a majority stake.

Shares in VMware leapt more than 62pc in the last 12 months and hit an all-time high on Thursday, 25 January.

It is reported that going public could allow Silver Lake to sell part of its stake in the company.

Several options in the running

Dell may also be considering a public share sale for its cloud computing venture, Pivotal Software. At present, Dell has approximately $46bn worth of debt, according to Bloomberg data.

The PC market has stagnated in the face of increased smartphone and tablet use, which has hurt the company. But its server arm remains a strong component of its current business model.

Dell logo on the roof of Amsterdam office. Image: JPstock/Shutterstock

Updated, 3.44pm, 26 January 2018: This article was updated to reflect the correct figures regarding Dell’s purchase of EMC. The firm was purchased for $67bn, not $67m as originally stated.

Ellen Tannam was a journalist with Silicon Republic, covering all manner of business and tech subjects