Dell stockholders will receive $13.65 per share in cash in a transaction valued at about $24.4 billion. The transaction represents a premium of 25% over Dell’s closing share price of $10.88 on Jan. 11, 2013, the last trading day before rumors of a possible going-private transaction were first published, as well as a premium of about 35% over Dell’s enterprise value as of that day, and implies a 37% premium over the average closing share price during the previous 90 days ending January 11.

Michael Dell said, “I believe this transaction will open an exciting new chapter for Dell, our customers and team members. We can deliver immediate value to stockholders, while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise.”

“Dell has made solid progress executing this strategy over the past four years, but we recognize that it will still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision,” he adds. “I am committed to this journey and I have put a substantial amount of my own capital at risk together with Silver Lake, a world-class investor with an outstanding reputation. We are committed to delivering an unmatched customer experience and excited to pursue the path ahead.”

“Michael Dell is a true visionary and one of the preeminent leaders of the global technology industry,” said Egon Durban, a Silver Lake Managing Partner. “Silver Lake is looking forward to partnering with him, the talented management team at Dell and the investor group to innovate, invest in long-term growth initiatives and accelerate the company’s transformation strategy to become an integrated and diversified global IT solutions provider.”

Michael Dell will continue as Chairman and CEO. The transaction is subject to regulatory approval.

Update: Microsoft has released the following statement:

“Microsoft has provided a $2 billion loan to the group that has proposed to take Dell private. Microsoft is committed to the long term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future.

“We’re in an industry that is constantly evolving. As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform.”

These price estimates fit within the range that was rumored as far back as mid-January, when it was reported that investment firm Silver Lake Partners would be the major player in the buyout. Since that time, Microsoft was also name-dropped as a potential investor in the buyout talks. Today’s journal report confirms that Silver Lake, Microsoft, and Dell founder Michael Dell are all major investors in the buyout. Dell’s 16% stake in Dell will contribute to the deal, while Microsoft is investing around $2 billion and Silver Lake will pitch in around $1 billion.

Dell, along with other PC manufacturers (such as HP), has been struggling to increase its value in the face of a changing computer industry. As consumers turn more to mobile solutions such as smartphones and tablets, PC sales have been declining. In addition, no new software has come along to spur average PC consumers to upgrade their desktop machines. Just last month a report showed that PC shipments in the fourth quarter of 2012. A privately held Dell might be able to make the type of business-wide changes that would upset investors in a public company.

Dude, you’re getting a computer with speakers, a monitor,a keyboard, a year of MSN internet access, and a Pentium 3 processor – for $849! Dude, you’re getting a Dell!

That’s right, the Dell Dude has spoken. Ben Curtis, also known as Slacker Steve from those early 2000s Dell commercials, thinks that all Dell needs to do to return to their former glory is kick the “dude, you’re getting a Dell” ad blitz back into gear.

“I think they’re making a huge mistake and simply need to bring back the Dell Dude!. That’s it. That’s all they need to do. If they brought me back, their sales, stock and media presence would skyrocket. That is by FAR the smartest move they could make,” he told Bloomberg.

It’s hard to tell just how serious he is. Since being let go from Dell in 2003 (after being busted for buying pot, although he was already on the way out before that arrest), Curtis has acted in a few off-Broadway shows and done some minor work on a couple of network dramas. He also worked as a waiter at Tortilla Flats for a little while.

It’s doubtful that even the power of Stoner Slacker Steve could fix all of Dell’s problems. But I wouldn’t be opposed to some new duderiffic ads.

Upon watching that relic of the past, did anyone else notice who’s riding in the car with Steve?

[Photo via IMDb]

Today, the Wall Street Journal is reporting that Microsoft may be willing to toss a few billion dollars into the deal. According to “a person familiar with the deal deliberations,” Microsoft hasn’t made a commitment yet, though it could invest “in the range of a couple of billion dollars.” According to the report, Silver Lake has been shopping for banks or other co-investors to fund the buyout.

Microsoft hasn’t commented on a possible deal, and the Journal’s unnamed source hasn’t provided any possible motivation for Microsoft’s intrest in Dell. It isn’t hard to speculate, however.

With the debut of the Surface tablet last year, Microsoft signaled a shift toward making mobile devices on its own, rather than letting OEMs decide how to best use Microsoft software. The growing integration between Windows 8 PCs, tablets, hybrid PC/tablets, and the Xbox Console demonstrated that Microsoft is serious about creating an Apple-like ecosystem for Windows 8. Dell’s development and manufacturing capabilities would be valuable resources during such a transition.

In the same vein, Dell may hold any number of valuable patents. With the number of patent lawsuits currently in courts around the world, the patent wars show no signs of abating.

The publication, citing a person familiar with the matter, reports that discussions took place on Tuesday for “a leveraged buyout at around $13 to $14 a share,” and that the buyout group would include Silver Lake in addition to at least one other investor “such as a pension or sovereign wealth fund, and Mr. Dell.”

The source reportedly also said that the group would need to arrange $2 billion in equity, and Michael Dell would “likely put his stock toward the deal” (worth at least $3.6 billion). “The group would also use some cash on Dell’s balance sheet, while taking on new debt of about $15 billion, to meet an equity purchase price of roughly $22 billion to $25 billion,” says the report. “The person said advisers are trying to bring the negotiations to a close quickly, either way.”

According to Fortune, TPG Capital was also in talks with Dell, but has walked away from the talks (but was working independently). That report cites multiple sources.

Dell shares are trading at $12.58 (-0.59‎, -4.47%‎) at the time of this writing.

Dell says it intends to keep Gale Technologies employees, and will continue to invest in additional engineering and sales capabilities to grow it. This, the company says, is consistent with its approach to previous acquisitions.

“Today, enterprises need solutions that enable operational benefits of speed, efficiency, and flexibility in the allocation and use of resources,” said Marius Haas, president of the Dell Enterprise Solutions Group. “Gale Technologies integrates well with our Active Infrastructure family, and provides an intuitive, flexible and comprehensive foundation for application, virtual desktop infrastructure and private cloud deployments for our customers.”

Gale Technologies CEO says, “We are excited to join the Dell team and contribute to the company’s transformation into an end-to-end IT solutions provider by extending the Active Infrastructure family of converged solutions. Combining Dell’s global scale, reach and enterprise portfolio with our people and technology will allow IT organizations to greatly improve the agility and efficiency of today’s and tomorrow’s data centers.”

“As customers increasingly move to fully-integrated solutions, we are favorably positioned to capitalize on these trends with industry-leading server, storage, networking, and software assets coupled together as end-to-end systems,” said Dario Zamarian, the newly appointed VP and GM of Dell Enterprise Systems & Solutions. “In creating this new organization, we plan to accelerate our ability to deliver differentiated value to customers – providing them with improved operational efficiency and the right balance of capability and price.”

Zamarian previously led Dell’s Networking business as VP and GM. He will report to Haas.

Terms of the acquisition were not disclosed.

Today Dell announced its acquisition of Quest Software has been completed. Quest is an IT management software provider that offers systems, security, applications, and business intelligence services. Dell states that Quest offers “next-generation” virtualized and cloud environments that will be “highly complementary” to Dell’s scalable mid-market design approach.

“The close of the Quest acquisition is a tremendous milestone in Dell’s journey to strengthen our end-to-end IT capabilities, empowering our customers to unlock greater value in their Dell technology investments, as well as their overall IT environments,” said John Swainson, president of Dell Software. “We are addressing key needs for our customers, helping them leverage the cloud, support ‘bring-your-own-device’ in their enterprise, and deploy mobile applications and virtualization to drive improved business results. The addition of Quest Software into Dell’s software portfolio will extend our industry-leading suite of solutions to a broader range of customers and partners, while simplifying operations, maximizing workforce productivity and delivering faster results.”

The $2.4 billion acquisition was approved by Dell stockholders at a meeting on September 25. Dell estimated a 2 to 3 cent dilutive impact on earnings per share in fiscal 2013 due to the purchase, and 4 to 5 cents in fiscal 2014.

Dell estimates that the acquisition of Quest brings Dell 100,000 customers, 5,000 channel partners, and a “$1 billion-plus” annual software business. In addition, the company brings with it 1,500 sales and marketing employees, as well as 1,300 software developers.

The deal is all part of Dell’s most recent initiative to grow their enterprise solution portfolio and further distinguish their capabilities from those of their largest competitors.

The acquisition will cost Dell $2.4 billion, and is expected to close by the end of Dell’s third fiscal quarter. Dell will pay $28.00 per share in cash for each share of Quest.

Here’s a few examples of what Dell is inheriting with the acquisition of Quest:

* The Quest One Identity and Access Management solution family adds to Dell’s very strong set of security assets with SonicWALL and Secureworks, creating a comprehensive set of security solutions to address important customer needs.

* Quest’s Performance Monitoring solutions for applications, networks and databases address a rapidly growing need for our customers. Industry analysts have consistently ranked Quest Foglight as a leading application performance monitoring solution. Businesses of all sizes are looking to reduce their IT complexity and automate workloads for their IT departments. Customers worldwide leverage Foglight to continually monitor their IT environments, proactively identifying and remedying performance issues before they become bigger problems.

* Quest’s Windows Server Management solutions complement Dell Services’ rapidly growing application modernization practice with recently acquired Clerity Solutions and Make Technologies.

* Effective database management is critical to the successful operation of most organizations. Quest’s Database Management capabilities offer a strong complement to Dell’s enterprise offering. Today, millions of DBAs, developers, and analysts around the world rely on Quest’s database management tools to simplify their work.

John Swainson, president of Dell’s Software Group comments on the acquisition of Quest Software:

“The addition of Quest will enable Dell to deliver more competitive server, storage, networking and end user computing solutions and services to customers,”

“Quest’s suite of industry-leading software products, highly-talented team members and unique intellectual property will position us well in the largest and fastest growing areas of the software industry. We intend to build upon the strong momentum Quest brings to Dell.”

Vinny Smith, chairman and chief executive officer of Quest Software comments on joining the Dell team:

“Clearly, Dell’s distribution, reach and brand are well recognized in the industry. Combine that with Quest’s software expertise and award-winning systems management products and you have a very powerful combination for our customers and partners,”

“With this transaction, Quest’s products and employees become the foundation for Dell’s critical software business.”

Quest was established in 1987, and is headquartered in Aliso Viejo, California. The company serves more than 100,000 customers around the World. They currently employ about 3,000 employees and operate 60 offices in 23 countries.

The competition, though, isn’t necessarily convinced. Speaking to a media and analyst briefing in Sydney, Australia earlier today Joe Kremer, managing director for Dell Australia, knocked the iPad as unsuitable for business use, due in large part to its price. According to Kremer, “[p]eople might be attracted to some of these shiny devices but technology departments can’t afford to support them.” He went on to say that “I don’t think this race has been run yet,” suggesting that the tablet market is still ramping up.

In a sense, Kremer is right: the tablet race hasn’t been run. There never was a tablet race. Apple’s competition was blindsided by the iPad in 2010. Most of their responses in the two years since have been a parade of too-little-too-late. With a few notable exceptions the non-iPad tablet market has consisted of failure after failure. Some tablets sell quite well, like the Samsung’s Galaxy Tab line and Amazon’s Kindle Fire. Many more, like the BlackBerry Playbook, the Motorola Xoom, and every tablet Dell ever made, do not. Tablet makers other than Apple have found themselves squabbling over a distant second place. What’s more, that isn’t likely to change if recent customer satisfaction data is to be believed.

Of course, Kremer’s argument isn’t wholly without merit. The iPad is expensive, even to the point of being cost-prohibitive for some businesses. What’s more, though the tablet market is effectively a one-horse race at this point, it’s still only two years old. While it’s hard to imagine another tablet knocking the iPad from it’s lofty perch, it’s certainly possible. Google is expected to come out with at least one Google-branded tablet this year, maybe more. It’s possible that a Google-branded device built by Google’s own in-house hardware company, the newly-acquired Motorola Mobility, can succeed where other would-be iPad competitors have failed.

[Source: Financial Review]

The new program is in response to ever increasing customer demand for denser more energy-efficient data solutions. Dell has been experimenting with ARM-based solution for over two years and sees utility for them in front-end and Hadoop environments. The program will develop ARM-based software and verify findings through strategic partnerships with a small number of customers.

A key component of ARM-based solutions is that they allow individual manufacturers to personalize chip design. With the popularity of ARM will come the need for companies like Intel to adapt to stay relevant in their current position, supplying chips to manufacturers. The change obviously wont happen overnight, but it probably does cause chip manufacturers to take notice.

Forrest Norrod, vice president and general manager of Server Solutions at Dell comments on the ARM-based initiative:

“Dell has a long history of addressing customer needs by delivering relevant innovation across the server portfolio and within its Data Center Solutions business. Today Dell is delivering this same innovation focus to the ARM server market, working hand-in-hand with customers and the community to enable development and testing of workloads for leading-edge hyperscale environments. We recognize the market potential for ARM servers, and with our experience and understanding of the market, are enabling developers with the right systems and access for the current state of the ARM server market maturity.”

We’ll have to see what comes out of these new partnerships. It sounds like ARM-based technology is in huge demand. As we require big data centers to manage more and more information, efficiency and cost become larger issues. Small reductions in manufacturing and development can lead to big savings overall.