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martinwolf Commentary
Six months ago, Dell went private in what was the largest technology buyout in history. In the time leading up to the transaction, Marty Wolf wrote several pieces explaining why privatization was the only option available for the company - a last, best chance to re-tool for the post-PC era.
Now, half a year after the transaction has closed, Michael Dell has stated that business "is running well ahead of ... plan." But now that they're private, Dell is no longer required to regularly report what that plan is - and it's difficult to assess the success to what extent the privatization has paid off.
But we can tell that Dell is currently benefitting from current secular market trends. A smaller decline in PC shipments and nominal growth in the Dell's relevant industry segments have meant that Dell's reseller network is more valuable now than it was when the company was taken private. Additionally, we're seeing other resellers trading at a significant premium - providing both a halo effect and a glimpse of potential valuations to come for Dell.
To successfully execute the transaction, however, Dell cannot rest on its laurels-it needs to more strongly push solutions and also protect its flank with devices. And it needs to continue to be cautious around big bets like public cloud investments.
It's the first step in a long march-and while Dell appears off to a strong start, the company's ultimate success will be borne out in the days and decisions to come.
To read Marty's complete thoughts on the transition so far, click here.
For previous posts in this series, see the following:
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Yahoo! Finance article - Jan. 27, 2013 - Marty Wolf commentary on what Microsoft might gain from its then-rumored investment in Dell
- Yahoo! Finance article - Feb. 6, 2013 - Marty Wolf commentary on what Dell must do to transform its business
- Yahoo! Finance article - Feb. 13, 2013 - Marty Wolf commentary on the services Dell must add to meet market needs and grow value systems - one more thing to overcome
- Yahoo! Finance article - July 16, 2013 - Marty Wolf commentary on why the Dell buyout deal is the last remaining option for Dell to have a future in the post-PC era
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About martinwolf
Walnut Creek, CA Bangalore, India
With offices in the San Francisco Bay Area and Bangalore, India, martinwolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 115 transactions in nine countries. We are a five-year member of the Merrill Lynch PS Referral Network, and are partnered with the Enterprise Advisory Department of CICC (a leading bank in China) and BMR Advisors, a leading professional services organization in India.
The firm is also a presenting sponsor of the Global IT M&A Forum.
martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.
To learn more about martinwolf, contact Matthew Putzulu at [email protected].
� martinwolf 2014
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