Copyright Drew Angerer, Getty Images
96657326

Dell Technologies is Said to be Considering IPO, Options

Jan. 26, 2018
Raising cash could help the company further expand or pay off some of its debt.

Dell Technologies is considering strategic options including a public stock offering, according to people familiar with the matter, as the corporate-technology company seeks ways to boost revenue and raise funds.

The board is meeting later this month and will discuss its options, said the people, who asked not to be identified because the talks are private. Round Rock, Texas-based Dell may also decide not to make any such moves at this time, the people said.

Founder and Chief Executive Officer Michael Dell took his company private in 2013, when he teamed up with Silver Lake Management LLC on a leveraged buyout. That freed Dell to cut costs and work to become a bigger supplier of hardware and software for corporate data centers 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-center 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 shows.

Another option is to buy the rest of VMware that Dell does not already own, said one person familiar with the matter. VMware shares have risen more than 60% in the past year.

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 and became part of Dell after the EMC acquisition.

Dell and VMware couldn’t immediately be reached for comment.

By Dina Bass, Alex Barinka and Kiel Porter

Popular Sponsored Recommendations

How Digital Twin Technology is Empowering Manufacturers

Sept. 27, 2023
This FAQ delves into why this technology offers business value and considerations toward implementation.

Navigating Disruption: A Leader’s Guide to Strategy Under Uncertainty

Nov. 1, 2023
AI, sustainability, digital--industrials are facing disruptive forces that are redefining what it takes to win. What got your company where it is today won’t get you where you...

Digitally Transforming Data and Processes With Product Lifecycle Management

Oct. 29, 2023
Manufacturers face increasing challenges in product development as they strive to consistently deliver improved results. Discover how industry leaders are improving time-to-market...

Gain a competitive edge with real-world lessons on private 5G networks

Nov. 16, 2023
The use of private networks in manufacturing applications is rapidly growing. In this paper, we present valuable insights and lessons learned from the field with the goal of enhancing...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!