Temasek, Silver Lake back Dell in $67b acquisition of EMC
Singapore's Temasek Holdings is supporting the $67 billion acquisition of data storage and cloud computing company EMC Corporation by US-based computer maker Dell. Other backers include Silver Lake and MSD Partners.
EMC's investors will be paid about $33.15 per share in cash, as well as a tracking stock linked to EMC's interest in cloud infrastructure and business mobility company VMware, according to a release. VMware will continue as a publicly traded company.
The merger is expected to close between May and October of next year, subject to regulatory and EMC stockholder approval. The resulting company will be the world's largest privately-controlled, integrated technology firm. Dell founder and CEO Michael Dell will serve as chairman and CEO of the combined entity.
Joining forces will give both companies the opportunity to address their weaker sectors: software and enterprise offerings, for Dell; and hardware and consumer, for EMC. The companies expressed particularly strong interest in the server, data center, mobile and security markets.
Financing for the deal will come through a combination of fresh equity from Michael Dell, his investment firm MSD Partners, Silver Lake and Temasek; the issuance of the VMware tracking stock; new debt financing; and cash in hand.
Silver Lake has a long history with Michael Dell. Not only did he contribute seed money at the firm's founding in 1999, the GP later supported the CEO in his $24.4 billion take-private of the company in 2013.
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