For Tucci, this transaction is expected to accelerate VMware’s growth across all of its businesses through “significant synergies” with Dell’s solutions and go-to-market channels, while remaining committed to investing in and partnering with its strong, industry ecosystem.
“We are excited and honoured to invest in the outstanding businesses built by Joe Tucci and his world-class management team,” adds Egon Durban, managing partner, Silver Lake.
“This is an extraordinary opportunity to continue and expand our partnership with the iconic technology entrepreneur Michael Dell and his talented team.
“We believe the strategic integration of EMC and Dell will generate unparalleled depth and breadth across servers, storage, virtualisation and the next era of converged infrastructure, creating a global technology platform poised for sustained long term growth and innovation in the years to come.
“We are doubling down and increasing our investment in this differentiated market leader for the next paradigm of enterprise computing.”
Under the terms of the agreement, EMC shareholders will receive $US24.05 per share in cash in addition to tracking stock linked to a portion of EMC’s economic interest in the VMware business.
Based on the estimated number of EMC shares outstanding at the close of the transaction, EMC shareholders are expected to receive approximately 0.111 shares of new tracking stock for each EMC share.
The transaction will be financed through a combination of new common equity from Michael S. Dell, MSD Partners, Silver Lake and Temasek, the issuance of tracking stock, as well as new debt financing and cash on hand.
According to Michael Dell, there are no financing conditions to the closing of the transaction.
Michael Dell and related stockholders will own approximately 70 percent of the company’s common equity, excluding the tracking stock, similar to their pre-transaction ownership.
Following completion of the transaction, Michael Dell will lead the combined company as chairman and chief executive officer - Tucci will continue as chairman and chief executive officer of EMC until the transaction closes.
Dell’s headquarters will remain in Round Rock, Texas, and the headquarters of the combined enterprise systems business will be located in Hopkinton, Massachusetts.