Dell Technologies Eyes Spinoff of Majority Stake in VMware; Michael Dell Quoted

Dell Technologies Eyes Spinoff of Majority Stake in VMware; Michael Dell Quoted
Michael Dell Chairman and CEO Dell Technologies

Dell Technologies (NYSE: DELL) has announced that it is considering spinning off about 81 percent of its equity ownership interest in VMware (NYSE: VMW) in an effort to create value and simplify capital structures.

Any potential spinoff would not transpire before September 2021 as Dell Technologies intends for the deal to be tax-free, the company said Wednesday.

“Regardless of the options we are exploring to create additional value, we are accelerating our strategy – which remains unchanged,” said Michael Dell, chairman and CEO of Dell Technologies. “We are focused on winning in the consolidating markets where we operate and innovating across the Dell Technologies portfolio to create integrated solutions that turn data into insights and action.”

In the event of a spinoff, Dell Technologies said it would formalize intellectual property agreements and other commercial arrangements similar to those in place, arrange payment of a special cash dividend on a pro rata basis by VMware to its shareholders and “negotiate terms consistent with an investment grade rating for both companies.”

Dell Technologies said its exploration of a spinoff is in an early stage and that it continues to assess several strategic options, including keeping its current ownership in VMware.

Dell Technologies acquired a majority stake in VMware in 2016 after Dell and EMC closed their $67B cash-and-stock merger.

You may also be interested in...

Gil Dussek CEO Gunnison Consulting Group

Gunnison Buys Federal IT Service Management Firm G2SF; Gil Dussek Quoted

Gunnison Consulting Group has acquired Global Solutions & Services Frameworks for an undisclosed sum to expand its information technology service management, mobile computing and cybersecurity capabilities in the federal government services market. “This deal aligns with our modernization strategy and we remain focused on improving critical government programs, while driving long-term innovation to meet evolving customer demands," said Gunnison CEO Gil Dussek.


Cybersecurity Firm Telos Launches IPO

Telos (Nasdaq: TLS) targeted to raise approximately $254M from the Ashburn, Virginia-based cybersecurity company's initial public offering Thursday, offering 15M shares of common stock with pricing at $17 each.