By Bloomberg
January 11, 2019

Michael Dell’s return to the public markets after a protracted absence has helped make him $12 billion wealthier.

The man who became famous selling computers more cheaply over a newish thing called the internet retreated from Wall Street’s glare in 2013, delisting a company in which he held a stake of just $3.8 billion as sales of personal computers sagged.

He rebuilt the company, turning maker of inexpensive PCs into a diversified tech powerhouse that sells everything from servers to security software. Now his holding in Dell Technologies Inc., which listed on the New York Stock Exchange last month, stands at $17 billion, according to calculations by Bloomberg.

“Over the last six years, the company has transformed into a $90 billion essential infrastructure provider with outstanding financial performance and a leading portfolio of end-to-end technology solutions,” a Dell Technologies spokesman said in an emailed statement.

The biggest-ever leveraged buyout in tech also is proving to be one of the most lucrative private equity transactions on record. Dell’s fortune is now $27 billion, according to the Bloomberg Billionaires Index, a ranking of the world’s 500 richest people, up from $15 billion in 2013. A spokesman for Michael Dell declined to comment on his net worth.

Dell’s wealth is managed by MSD Capital, an investment firm led by Glenn Fuhrman and John Phelan. Founded in 1998, MSD is regarded as one of the most sophisticated family offices, with the expertise and capital to buy companies and manage internal hedge funds. Some of its strategies have been made available to outside clients through affiliate MSD Partners.Dell’s mounting fortune vividly illustrates just how successful the billionaire has been in remaking his company using the private equity playbook, with help from investor Silver Lake.

Along the way, he regained control of his company. When Dell Inc. was delisted, he held a stake of about 15 percent. After committing an estimated $8 billion of stock and cash during the privatization, he now owns about half of the equity and about three-quarters of the voting rights.

Financial engineering explains some of the gain. Dell’s $67 billion purchase of data-storage giant EMC Corp. in 2016, then a record takeover for a tech firm, tripled the company’s debt but helped it expand into software and services. The EMC deal was mostly for cash, and the rest was paid through the new security linked to part of EMC’s interest in publicly traded VMware Inc.

The tracking stock issued as part of the deal was meant to reflect VMware’s value. But the security, known by its ticker DVMT, persistently traded at a discount to VMware.

That gap effectively accrued to Dell’s owners, dismaying some investors in the tracking stock. It meant investors balked at Dell’s initial offer to buy out shareholders of DVMT and forced it to sweeten the bid to get the deal done.

That still left plenty for Michael Dell.

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