Dell Technologies, the world’s largest private technology company, has announced plans to become a publicly traded company once again. It is re-emerging as a public company five years after its chief executive Michael Dell closed a $25 billion deal to take the company private.
The tech giant will return to the public market by buying out its trading stock, DVMT in a cash and share-swap deal valued at $21.7 billion. The shares are said to be worth about $17 billion as of Friday, reports Bloomberg. The valuation is created to mirror the value of VMware, in which Dell holds a controlling stake. Dell says VMware will pay $11 billion in special cash dividend to its shareholders and it will offer more shares or cash to make up the difference.
The Class C common stock of Dell Technologies will become publicly listed on the New York Stock Exchange. In 2013, Michael Dell took the company he founded in his dorm room private with investment firm Silver Lake Management for about $25 billion. The move came amidst declining sales in the PC business and its pivot to software and services. The move mainly silenced Carl Icahn, the 82-year-old American investor who raised questions about Dell’s leadership.
As an effort to strengthen its position in the software industry, Dell acquired EMC Corp in 2016 for a record $67 billion. The deal is believed to have tripled the company’s debt and Dell executed the deal via the DVMT tracking stock. Since its issue, DVMT stocks has almost doubled to close at $84.58 on Friday. In an interview with CNBC, Michael Dell said he wants VMware to remain an independent publicly traded company and that Silver Lake is committed to investment in Dell.
Bloomberg notes that holders of DVMT shares will have the option to either swap their shares for Dell’s Class C common stock or take $109 in cash per Class V share. The company is offering 29 percent premium to the closing price of its Class V shares. Since going private, Dell has dropped its image as a PC maker to cover the broader IT industry.
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The company is now known for its lineup of servers, storage hardware and networking gear. With EMC acquisition, Dell has also created a suite of software tools. In the past few years, Dell has tried to successfully integrate its hardware and software to realize higher profit margins.