Silver Lake Management LLC and partners are close to lining up about $15 billion in funds for a buyout of Dell Inc. (DELL), the third-biggest maker of personal computers, said people familiar with the matter.
Lenders including Credit Suisse Group AG, Royal Bank of Canada, Barclays Plc (BARC) and Bank of America Corp. may informally disclose terms to a small group of possible buyers of the bridge loan as soon as today, said one of the people, who asked not to be named as the process is private. Dell’s enterprise value is about $19.7 billion, according to data compiled by Bloomberg.
Turning the computer maker into a private company would allow Michael Dell and his private-equity backers to manage the company’s finances differently, said a person familiar with the matter. Silver Lake has been investing in technology companies since its founding in 1999. Its latest fund, Silver Lake Partners III LP, was generating an 18 percent net internal rate of return.
The deal could be announced as soon as next week, said one of the people. The lenders are informally canvassing debt investors to gauge whether they can parcel out pieces of the financing in a so-called syndication process once the deal is final, another person said. JPMorgan Chase & Co. (JPM), which is advising Round Rock, Texas-based computer maker Dell, would also provide so-called staple financing to the group led by Silver Lake, said one of the people.
The technology-focused buyout firm’s financing is crucial to completing a leveraged buyout of Dell, which would be the biggest since the financial crisis. The rest of the funds to take Dell private would come from Silver Lake and its partners, Dell itself or founder and Chief Executive Officer Michael Dell, said one of these people.
Dell, which lost almost a third of its value last year, is struggling amid competition from tablet makers such as Apple Inc. Going private may give Dell more room to overhaul the company’s corporate structure and focus on data-center equipment instead of PCs.
