Dell, Inc. and Silver Lake, a private-equity firm, will purchase data storage company EMC Corporation, for around $67 Billion, between cash and stock. This will be the biggest technology takeover in history.
The Wall Street Journal reports that the $33.15 price tag per share represents a 28% premium over the company’s closing price. It was previously reported by The Wall Street Journal that the two companies were planning a merger.
Dell expects to fund the deal through a combination of equity from Michael Dell (Chief Executive), Silver Lake, tracking stock, debt financing, and cash-on-hand. There are no financing conditions on the deal closing. Dell recently stated they held $12 billion in debt.
The company will focus on de-leveling in the first year-and-a-half to two years, after the deal closes. They expect the deal to take place between May and October of 2015.
The deal will be the largest tech takeover since the pending $37 billion agreement between Avago Technologies Ltd. and Broadcom Corp.
EMC shares have increased 1% since the announcement, early Monday. EMC’s Chief Executive, Joe Tucci, will remain in his position until the deal closes. He will be succeeded by Dell CEO and Chairman Michael Dell. Tucci has considered giving up his CEO spot for a few years. In a statement, he referred to the deal as the best way for the company moving forward.
Once the companies combine, they will have around $80 Billion in revenue. Tucci wrote that it will be “far more efficient and effective to operate as a private company,” with more freedom to invest in the long term.
EMC has been under pressure to raise its stock price since last year. In 2014, hedge fund Elliot Management Corp. took a 2% stake of the company and pressured it to take off of VMware. VMware has a market value of around $34 billion. An arrangement made between the fund and EMC that prevented public pressuring between the companies expired back in September.