Debt cut plan: Dell mulls return to market after 4 years of going private

Just over four years since Michael Dell took his namesake PC company private, the billionaire is considering taking Dell Technologies public again in a move to help it raise cash and reduce its substantial debt. An initial public offering would undo one of the biggest leveraged buyouts the tech industry has ever seen.
 
The board is meeting later this month and will discuss strategic options including an IPO, according to people familiar with the matter. Round Rock, Texas-based Dell may also decide not to make any such moves at this time, said the people who asked not to be identified because the talks are private.

 
Dell took his company private in 2013, when he teamed up with Silver Lake on a leveraged buyout. That freed Dell to cut costs and work to become a bigger supplier of hardware and software for corporate data centres without the quarterly investor scrutiny that comes with being a public company. Three years later, Dell acquired storage-technology provider EMC Corp. and its majority stake in data-centre software vendor VMware, taking on a massive debt load to seal the $67 billion deal.
 

Raising cash could help the company further expand or pay off some of the debt. Dell Technologies has about $46 billion of debt, according to data compiled by Bloomberg. That includes about $3 billion of bonds maturing in 2018 and $4.35 billion due next year while the company also has loans outstanding, the data show.

 
Another option is to buy the rest of VMware that Dell does not already own, one person familiar with the matter said. VMware shares surged the most in a year and a half to $149.87, a record high.
 
Dell is also considering a public share sale for its Pivotal Software Inc. cloud-computing venture. Dell met with bankers last year to discuss that possibility and was told the company could fetch a valuation of $5 billion to $7 billion, said one of the people. Still, any Pivotal offering may wait until the company has converted more of its business into wider-margin software and subscriptions and away from less-profitable services businesses, the person said.

 
Pivotal, a cloud software and services firm, was once a joint venture of VMware, EMC and General Electric Co. and became part of Dell after the EMC acquisition.