Tech giant Dell will return to public markets by buying out its so-called “tracking stock” in a cash and share-swap deal valued at $21.7 billion (£16.5 billion), the company said in a filing Monday.
The shares were created to mirror the value of software maker VMware Inc., in which Dell has a controlling stake. VMware makes makes virtualisation software to maximise workloads on cloud tools or servers.
In a complex series of transactions, VMware will pay DVMT shareholders an $11 billion dividend and Dell will offer more shares — or cash — to make up the difference. Dell Technologies Class C common stock will then become publicly listed on the New York Stock Exchange.
The move aims to simplify the tech giant’s tangled corporate structure without weighing on its balance sheet, and allow it to raise money on the markets for any future acquisitions.
“I am proud to lead this great company into its next chapter as we continue to evolve and grow to the benefit of our customers, partners, investors and team members,” said Michael Dell, Chairman and CEO.
He added: “Unprecedented data growth is fueling the digital era of IT, and we are uniquely positioned with our portfolio of technologies and services to enable the digital, IT, security and workforce transformations of our customers.”
Michael Dell, who currently owns 72 percent of the company, will continue to serve as Chairman and CEO.
Pat Gelsinger, Chief Executive Officer at VMWare said: “We are pleased to be in a position to return capital to stockholders through this one-time special dividend, which is the result of the exceptional performance of our business and our broad-based portfolio’s strong cash flow generation.”
He added: “After the transaction concludes, I am looking forward to VMware’s continued independent status, strategy and capital allocation policy for organic investment, M&A and shareholder returns.”