The combination of Dell and EMC creates an enterprise solutions powerhouse
The combination of Dell and EMC will create the world’s largest integrated technology company

Dell Inc. and EMC Corporation recently announced they have signed a definitive agreement under which Dell, together with its owners, Michael S. Dell, founder, chairman and chief executive officer of Dell, MSD Partners and Silver Lake, the global leader in technology investing, will acquire EMC Corporation, while maintaining VMware as a publicly-traded company.

The EMC Board of Directors approved the merger agreement and intends to recommend that stockholders of EMC approve the agreement.

Delivering future-ready technologies to customers

The combination of Dell and EMC will create the world’s largest privately-controlled, integrated technology company. The company will be a leader in the extremely attractive high-growth areas of the $2 trillion information technology market with complementary product portfolios, sales teams and R&D investment strategies. The transaction combines two of the world’s greatest technology franchises with leadership positions in servers, storage, virtualisation and PCs and it brings together strong capabilities in the fastest growing areas of the industry, including digital transformation, software-defined data centre, hybrid cloud, converged infrastructure, mobile and security.

Since becoming a private company, Dell has had the flexibility and agility to focus completely on customers and invest for long-term results. The transaction will unite Dell’s strength with small business and mid-market customers with EMC’s strength with large enterprises to fuel profitable growth and generate significant cash flows. The combined company will consist of strategically-aligned businesses and incubated high-growth assets, fostering innovation, enabling customer choice and attracting and retaining world-class talent.

An enterprise solutions powerhouse

“The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers industry leading innovation across their entire technology environment. Our new company will be exceptionally well-positioned for growth in the most strategic areas of next generation IT including digital transformation, software-defined data centre, converged infrastructure, hybrid cloud, mobile and security,” said Mr. Dell. “Our investments in R&D and innovation along with our privately-controlled structure will give us unmatched scale, strength and flexibility, deepening our relationships with customers of all sizes. I am incredibly excited to partner with the EMC, VMware, Pivotal, VCE, RSA and Virtustream teams and am personally committed to the success of our new company, our customers and partners.”

"Our new company will be exceptionally well-positioned for growth in the most strategic areas of next generation IT including digital transformation, software-defined data centre, converged infrastructure, hybrid cloud, mobile and security”, says Mr. Dell, Founder, Chairman, CEO, Dell

“I’m tremendously proud of everything we’ve built at EMC – from humble beginnings as a Boston-based startup to a global, world-class technology company with an unyielding dedication to our customers,” said Joe Tucci, chairman and chief executive officer of EMC. “But the waves of change we now see in our industry are unprecedented and, to navigate this change, we must create a new company for a new era. I truly believe that the combination of EMC and Dell will prove to be a winning combination for our customers, employees, partners and shareholders.”

"We are excited and honoured to invest in the outstanding businesses built by Joe Tucci and his world-class management team. This is an extraordinary opportunity to continue and expand our partnership with the iconic technology entrepreneur Michael Dell and his talented team,” said Egon Durban, managing partner of Silver Lake. “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.”

VMware to remain publicly-traded company

VMware will remain a publicly-traded company and continue to provide customers value through leading software- defined data centre technology, together with its cloud, mobile and desktop offerings. 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. VMware remains committed to investing in and partnering with its strong, industry ecosystem.

Transaction terms

The transaction is expected to 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. There are no financing conditions to the closing of the transaction.

"I truly believe that the combination of EMC and Dell will prove to be a winning combination for our customers, employees, partners and shareholders”, says Joe Tucci, Chairman, CEO, EMC

Mr. 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, Mr. Dell will lead the combined company as chairman and chief executive officer. Mr. 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, Mass.

The transaction

Historically, Dell and EMC have maintained conservative financial policies, and have strong track records of cash flow generation and debt reduction. The transaction is expected to have a neutral to positive impact on Dell’s current corporate credit ratings. The combined company will focus on rapidly de-levering in the first 18 to 24 months following the closing of the transaction, and on achieving and maintaining investment grade debt ratings.

In connection with the financing of the transaction and prior to or at the time of its closing, Dell expects to redeem any outstanding 5.625% Senior First Lien Notes due 2020.

The transaction is subject to customary conditions, including receipt of required regulatory and EMC stockholder approvals. The transaction is expected to close in the second or third quarter of Dell’s fiscal year ending February 3, 2017 (within the months of May to October 2016).

Share with LinkedIn Share with Twitter Share with Facebook Share with Facebook
Download PDF version

In case you missed it

Managing security during unprecedented times of home working
Managing security during unprecedented times of home working

Companies are following government guidance and getting as many people as possible working from home. Some companies will have resisted home working in the past, but I’m certain that the sceptics will find that people can be productive with the right tools no matter where they are. A temporary solution will become permanent. But getting it right means managing risk. Access is king In a typical office with an on-premise data centre, the IT department has complete control over network access, internal networks, data, and applications. The remote worker, on the other hand, is mobile. He or she can work from anywhere using a VPN. Until just recently this will have been from somewhere like a local coffee shop, possibly using a wireless network to access the company network and essential applications. CV-19 means that huge numbers of people are getting access to the same desktop and files, and collaborative communication toolsBut as we know, CV-19 means that huge numbers of people are getting access to the same desktop and files, applications and collaborative communication tools that they do on a regular basis from the office or on the train. Indeed, the new generation of video conferencing technologies come very close to providing an “almost there” feeling. Hackers lie in wait Hackers are waiting for a wrong move amongst the panic, and they will look for ways to compromise critical servers. Less than a month ago, we emerged from a period of chaos. For months hackers had been exploiting a vulnerability in VPN products from Pulse Secure, Fortinet, Palo Alto Networks, and Citrix. Patches were provided by vendors, and either companies applied the patch or withdrew remote access. As a result, the problem of attacks died back.  But as companies race to get people working from home, they must ensure special care is taken to ensure the patches are done before switching VPNs on. That’s because remote desktop protocol (RDP) has been for the most part of 2019, and continues to be, the most important attack vector for ransomware. Managing a ransomware attack on top of everything else would certainly give you sleepless nights. As companies race to get people working from home, they must ensure special care is taken to ensure the patches are done before switching VPNs on Hackers are waiting for a wrong move amongst the panic, and they will look for ways to compromise critical serversExposing new services makes them also susceptible to denial of service attacks. Such attacks create large volumes of fake traffic to saturate the available capacity of the internet connection. They can also be used to attack the intricacies of the VPN protocol. A flow as little as 1Mbps can perturbate the VPN service and knock it offline. CIOs, therefore, need to acknowledge that introducing or extending home working broadens the attack surface. So now more than ever it’s vital to adapt risk models. You can’t roll out new services with an emphasis on access and usability and not consider security. You simply won’t survive otherwise. Social engineering Aside from securing VPNs, what else should CIO and CTOs be doing to ensure security? The first thing to do is to look at employee behaviour, starting with passwords. It’s highly recommended that strong password hygiene or some form of multi-factor authentication (MFA) is imposed. Best practice would be to get all employees to reset their passwords as they connect remotely and force them to choose a new password that complies with strong password complexity guidelines.  As we know, people have a habit of reusing their passwords for one or more online services – services that might have fallen victim to a breach. Hackers will happily It’s highly recommended that strong password hygiene or some form of multi-factor authentication (MFA) is imposedleverage these breaches because it is such easy and rich pickings. Secondly, the inherent fear of the virus makes for perfect conditions for hackers. Sadly, a lot of phishing campaigns are already luring people in with the promise of important or breaking information on COVID-19. In the UK alone, coronavirus scams cost victims over £800,000 in February 2020. A staggering number that can only go up. That’s why CIOs need to remind everyone in the company of the risks of clickbait and comment spamming - the most popular and obvious bot techniques for infiltrating a network. Notorious hacking attempts And as any security specialist will tell you, some people have no ethics and will exploit the horrendous repercussions of CV-19. In January we saw just how unscrupulous hackers are when they started leveraging public fear of the virus to spread the notorious Emotet malware. Emotet, first detected in 2014, is a banking trojan that primarily spreads through ‘malspam’ and attempts to sneak into computers to steal sensitive and private information. In addition, in early February the Maze ransomware crippled more than 230 workstations of the New Jersey Medical Diagnostics Lab and when they refused to pay, the vicious attackers leaked 9.5GB or research data in an attempt to force negotiations. And in March, an elite hacking group tried to breach the World Health Organization (WHO). It was just one of the many attempts on WHO and healthcare organisations in general since the pandemic broke. We’ll see lots more opportunist attacks like this in the coming months.   More speed less haste In March, an elite hacking group tried to breach the World Health Organization (WHO). It was just one of the many attempts on WHOFinally, we also have bots to contend with. We’ve yet to see reports of fake news content generated by machines, but we know there’s a high probability it will happen. Spambots are already creating pharmaceutical spam campaigns thriving on the buying behaviour of people in times of fear from infection. Using comment spamming – where comments are tactically placed in the comments following an update or news story - the bots take advantage of the popularity of the Google search term ‘Coronavirus’ to increase the visibility and ranking of sites and products in search results. There is clearly much for CIOs to think about, but it is possible to secure a network by applying some well thought through tactics. I believe it comes down to having a ‘more speed, less haste’ approach to rolling out, scaling up and integrating technologies for home working, but above all, it should be mixed with an employee education programme. As in reality, great technology and a coherent security strategy will never work if it is undermined by the poor practices of employees.

How does audio enhance security system performance?
How does audio enhance security system performance?

Video is widely embraced as an essential element of physical security systems. However, surveillance footage is often recorded without sound, even though many cameras are capable of capturing audio as well as video. Beyond the capabilities of cameras, there is a range of other audio products on the market that can improve system performance and/or expand capabilities (e.g., gunshot detection.) We asked this week’s Expert Panel Roundtable: How does audio enhance the performance of security and/or video systems? 

How have standards changed the security market?
How have standards changed the security market?

A standard is a document that establishes uniform engineering or technical criteria, methods, processes, and/or practices. Standards surround every aspect of our business. For example, the physical security marketplace is impacted by industry standards, national and international standards, quality standards, building codes and even environmental standards, to name just a few. We asked this week’s Expert Panel Roundtable: How have standards changed the security market as we know it?