Shares in Dell have soared after Bloomberg reported senior executives at the personal-computer maker are in talks with two private equity firms, TPG Capital and Silver Lake, to take the company off-market.
Dell’s market capitalisation sits at $US18.9 billion, meaning financing is the biggest impediment to the company going private.
But the deal, while mammoth, wouldn’t be the largest that private equity has ever pulled off.
If we go by Business Insider’s 2011 round-up of the 15 biggest private equity deals in history, it would come in at number 14 once you adjust for inflation, knocking the $US15 billion deal for Hertz ($16.95 adjusted for inflation) off the list. That is, providing Dell’s shareholders don’t demand a price much higher than the company’s market value (Dell’s shares lost a third of their value in 2012, so shareholders might be keen to sell out).
The biggest private equity deal in history is also the most famous: the 1989 deal for tobacco and food products company RJR Nabisco, which KKR paid $US31.1 billion for ($US55.38 billion, inflation adjusted). That deal would go on to spawn both a best-selling book, Barbarians at the Gate: The Fall of RJR Nabisco, and a movie based on it. That deal is notorious for its hostility – it’s no surprise it needed more money to pull off than most.
Myriam Robin is a reporter for SmartCompany and its sister site LeadingCompany. She has degrees in economics, international studies and journalism. She likes writing about businesses taking risks and doing new things.
