DealoftheWeek:DelltoBuyEMCfor$67B

AnnouncementDate

October12,2015

Acquirer
AcquirerDescription

TargetCompany
TargetDescription

DellInc.
Privatelyownedmultinationaltechnologycompanythatdevelops,
sells,repairs,andsupportscomputersandrelatedproducts/services
Foundedin1984andheadquarteredinRoundRock,Texas
EMCCorporation(NYSE:EMC)
Develops,delivers,andsupportsinformationinfrastructureandvirtual
infrastructuretechnologies,solutions,andservices
Foundedin1979andheadquarteredinHopkinton,Massachusetts
MktCap:$54.6billion
LTMEBITDA:$5.4billion
EV:$53.3billion
LTMEV/Revenue:2.2x
LTMRevenue:$24.7billion
LTMEV/EBITDA:9.8x
Price:$67billion
Consideration:Cash&Stock
J.P.Morgan
MorganStanley
ThecombinationofDellandEMCcreatesanenterprisesolutions
powerhousebringingourcustomersindustryleadinginnovationacross
theirentiretechnologyenvironment,Mr.Dellsaid.Ournew
companywillbeexceptionallywellpositionedforgrowthinthemost
strategicareasofnextgenerationI.T.
BuyingEMCbringsDelloneofthebiggestnamesincomputerdata
storage,addingtoexistingofferingslikenetworkservers,corporate
softwareandmobiledevices
InaninterviewonCNBC,MichaelDellsaidthattherevenuesynergies
herearethreetimeslargerthanthecostsynergies.
Dellwillpay$33.15perEMCshare,whichincludes$24.05incashplus
$9.10worthoftrackingstocklinkedtopartofEMCseconomicinterest
inVMware,apubliclytradedbusiness
DebtwillbeprovidedbyBarclays,BofAMerrillLynch,Citi,Credit
Suisse,DeutscheBank,Goldman,Sachs&Co.,J.P.MorganandRBC
CapitalMarkets
EMCalsohasincludeda60daygoshopprovision,whichwould
allowittosolicitsuperioroffers
TheDellfounderandchiefexecutive,MichaelS.Dellwillleadthe
combinedcompanyaschairmanandchiefexecutive
Thedealwouldbethesecondlargesttechmergerever,behindonly
the$106billiontieupbetweenAOLandTimeWarnerin2000,andthe
largestevertakeprivatetransactionforatechcompany

TargetFinancial
Statistics
Price/Consideration
AcquirerAdvisor
TargetAdvisor
Rationale

DealPoints

OfNote

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