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equity finance Debt Markets Can Finance Potential Buyout of Dell Barclays Says

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While the rise in average deal size is a positive for strategic activity, the primary issue for Dell,world education. and for other potential LBO candidates, is the markets maximum capacity to absorb a large loan offering from a single issuer, special education credit strategists led by Bradley Rogoff wrote in the report. Todays market is sufficiently pliable to absorb Dell and perhaps a small number of other similarly sized deals this year.

Credit markets can finance large deals due to the return of collateralized loan obligations, which fueled the rise of LBOs in 2005-2007,First commercial skipping and now Dish Network aims for a true TV anywhere experience. according to Barclays. Since the 2008 financial crisis, the debt markets have shown an ability to provide about $10 billion of funding, including $5 billion to $7 billion of bonds and $3 billion to $4 billion of loans, the bank said.

A group including Michael Dell and private-equity firm Silver Lake Management LLC is in talks with banks to purchase the Round Rock, Texas-based company in a leveraged buyout, people with knowledge of the matter said this week.

The capacity of the loan market to support larger leveraged buyouts is increasing, with almost $100 billion of the debt being used to fund mergers and acquisitions last year, the bank said today in a research report. The level is comparable with 2005, when the buyout boom was beginning, according to the report.

The takeover, based on market value, could be the largest buyout of a technology company since 2007, when KKR & Co. bought First Data Corp. for more than $25 billion, according to data compiled by Bloomberg. Dell, the third-largest maker of personal computers, has a market capitalization of about $22.5 billion, according to data compiled by Bloomberg.

Banks arranged $637 billion of U.S. leveraged loans last year, compared with a record $892 billion in 2007, Bloomberg data show.

The loan funds are a type of collateralized debt obligation that pool high-yield loans and slice them into securities of varying risk and returns. Leveraged-loans are a form of junk debt rated below Baa3 by Moodys Investors Service and lower than BBB- at Standard & Poors.

We still expect the more cautious macro environment and changing regulatory landscape to prevent a ramp-up from being as steep this time around, the Barclays strategists wrote.

Debt markets can support the $15 billion of loans and bonds needed to back a potential buyout of Dell Inc. (DELL), according to Barclays Plc.

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Banks may be hindered from sizable lending commitments because of increased focus on equity finance Debt Markets Can Finance Potential Buyout of Dell Barclays Saysimproving their balance sheets due to more regulations, according to the report.

The return of big LBOs, last seen before the 2008 financial crisis, is delayed in part by the reluctance of private-equity firms to invest large sums in deals, Barclays said in the research report.

CLO issuance also peaked in 2007, pooling about $105 billion to invest in junk-grade loans, according to Wells Fargo & Co., which estimates that as much as $80 billion could be raised this year. That would surpass the $55 billion of new CLOs in 2012, which topped the banks original forecast for just $12 billion in 2012.

equity finance Silver Lake seeks investors in Dell deal sources

SETTING SUN

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A Dell computer logo is seen on a laptop at Best Buy in Phoenix, Arizona, February 18,online education. 2010.

Wall Street analysts without direct knowledge of the deal discussions have cast doubt on the wisdom of investing in a stagnant PC industry rapidly getting eclipsed by a growing preference for mobile connected devices, like tablets.

Its not happening, another source told Reuters on Thursday, responding to media reports that Temasek is one of the prospective investment partners talking to Silver Lake about joining the consortium.

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(Reporting by Saeed Azhar in Singapore; Additional reporting by Nicola Leske in New York; Editing by Paritosh Bansal,Wikipedia the free encyclopedia 1. Gerald E. McCormick, Nick Zieminski and Stephen Coates)

Founder and CEO Mike Dell remains a linchpin of the effort. The man who grew Dell from a college dorm-room hobby into the worlds No. 3 PC maker is sitting on an estimated personal fortune of $14.6 billion, according to Forbes.

Silver Lake is a known quantity to Dell or its top executives. Michael Dell was an early investor in their funds while board member Alex Mandl has also worked with the firm in the past.

While Silver Lake has yet to line up investment partners, the buyout firm has told its bank lenders that it remains very confident about its ability to secure equity financing, two of the sources said.

By Nadia Damouni and Poornima Gupta and Saeed Azhar

Dell also has formed a special committee to take a close look at any potential deal on the table, multiple sources with knowledge of the matter told Reuters.

Thus r, Singapores state investor Temasek Holdings Pte Ltd -- another prospective equity partner that Silver Lake has tapped -- is not interested in joining the consortium, the people said.

One of the sources aware of Temaseks strategy said a company like Dell does not fit into its investment themes, which include emerging champions and growing middle-income populations.

Silver Lake is having markedly more success on other aspects of the deal. It has tapped Credit Suisse, Bank of America Merrill Lynch, Barclays and RBC to finance a potential deal, sources have previously told Reuters.

One of the two sources said Silver Lake did not need to line up firm commitments from equity partners like CPPIB ahead of time, because those could be secured after a deal structure is devised and put in place.

In the PC market itself, Dell has steadily ceded market share to nimbler rivals such as Lenovo Group and is struggling to re-ignite growth. Thats in spite of Michael Dells best efforts in the five years since he retook the helm of the company he founded in 1984, following a brief hiatus during which its fortunes waned rapidly.

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It is not pinned down as to what might be rolled and what might be new. The other equity partners dont have to show up with a signed commitment letter, the source said on condition of anonymity because the discussions are not public.

(Reuters) - Silver Lake Partners, trying to finalize a bidding group to take Dell Inc private, is in talks with the manager of Canadas pension plan and other potential investment partners, people miliar with the matter said.

($1 = 1.22 Singapore dollars)

Dells software chief, John Swainson, who joined last March, was a senior advisor at Silver Lake.

It is unclear how much the billionaire will contribute to the buyout, or how much of his 14 percent stake in Dell will be rolled into the deal, the sources said.

Silver Lake, in its quest to put together what would be the largest buyout since the global financial crisis, has reached out to the $170 billion Canada Pension Plan Investment Board and other investors in its fund, known as limited partners, the people said.

It is not around the equity. There is a very fluid situation now.

A Temasek spokesman declined to comment on market speculation. A spokesman for the CPPIB declined to comment. Silver Lake could not be immediately reached for comment. Dell declined to comment.

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Credit: Reuters/Joshua Lott

A potential buyout of Dell -- a $19 billion company -- would allow Dell, which has been trying to become a one-stop shop for corporate technology needs as the PC market shrinks, to conduct that difficult makeover away from public scrutiny.

Dell,Prominence Of Reputed School Of Motoring. which has been in talks with private equity firms on a potential buyout, has had on-and-off discussions with the firms but talks heated up late last year, sources have said.

Michael Dells grand plan equity finance

But Silver Lake is clearly has interest in betting on that upside, which means it might enable Michael Dell to regain the autonomy he first lost upon taking his company public 25 years ago. No wonder hes been so eager to find a private equity partner.

Remember, it was Dell that reached out to private equity firms -- not the other way around. And Michael Dell not only would be expected to roll over his existing 16% stake, but chances are hed also invest significantly more capital from his personal fortune. In other words, this buyout wouldnt be about founder liquidity. Instead, the founder would be doubling down and expecting to retain control. How exactly would Silver Lake convince him to go back out on an IPO road show in 2017 or 2018? Is it really betting that time away from bank analysts makes the heart grow fonder?

Yes, this is getting ahead of ourselves a bit. Silver Lake hasnt even made a formal offer yet, let alone one that Dell (DELL) or its shareholders have accepted. And I remain skeptical. But private equity firms dont get this r into deal talks without having mapped out a viable exit plan, even if the specifics usually change over time.

FORTUNE -- How would Silver Lake Partners sell Dell Inc. after taking it private for upwards of $25 billion?

MORE: Can private equity solve Dells dilemma?

Its also possible that Silver Lake could simply sell its equity position to another private equity firm-- thus keeping Dell private and independent -- although such changes in control typically trigger debt restructuring (worth noting that such triggers dont seem to exist on most of Dells existing debt).

Typically, private equity firms exit their investments either by selling the company or taking it public. Dell, however, would be a very difficult company to sell at a premium (if it were to to collapse,personal finances Personal Finance. of course, then this exercise is largely irrelevant). Not only because of its size, but also because the universe of possible strategic acquirers could probably fit on a chip. Maybe Lenovo (LNVGY). Maybe Oracle (ORCL). Maybe Cisco (CSCO). Or maybe IBM (IBM) is having PC sellers remorse. Worth noting that none of these comMichael Dells grand plan, equity financepanies are rumored to be prepping a rival bid to Silver Lake.

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Obviously such a scenario is dependent on Dell successfully transitioning its core focus from hardware to services, and a variety of other business ctors. Moreover, it must do so without relying on large acquisitions -- since that recent strategy is the reason Dells massive operating cash flows keep getting gobbled up (thus hampering its ability to service and repay debt).

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Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community in Roxbury, Massachusetts. He currently lives just outside of Boston.

This is an appealing theory, With What Are Really Web Based Classes Composed because everyone gets what they want. Silver Lake has a profitable exit path, lenders get paid and Michael Dell gets to keep running his company as a private, special education independent entity.

A more likely scenario would an IPO, since that is what ultimately happens to almost all $15 billion+ companies that get acquired by private equity (a notable exception being Alltel, which was sold to Verizon). The problem here, however, is that this entire deal is being driven by Michael Dells abhorrence of running a publicly-traded company.

So if not a sale and not an IPO, whats left? Well, an anonymous emailer suggests the following:

Michael Dell could take out the PE sponsor in 5-7 years, once the company has paid down a good portion of the acquisition debt. At that point, Michael Dell would recap the company and use the proceeds to repay Silver Lake at more than two times its original investment.

Intel reports lling sales figures equity finance

Meanwhile, speculation about Dells potential buyout continued, shunli1217.typepad.com with sources claiming Silver Lake Partners is in talks with the manager of Canadas pension plan and other potential investment partners.

Sales of $13.5 billion last quarter matched average predictions of analysts, according to data compiled by Bloomberg. Net income fell to $2.47 billion, or 48 cents a share, compared 45 cents projected by analysts.

While Silver Lake has yet to line up investment partners, the buyout firm has told its bank lenders that it remains very confident about its ability to secure equity financing.

Speculation

They are definitely coming from behind and their market is moving away from them, said Patrick Wang, an analyst at Evercore Partners. They are trying to breathe some life into the PC marketIntel reports lling sales figures equity finance.

Silver Lake has reached out to the $170 billion Canada Pension Plan Investment Board and other investors in its fund, known as limited partners, the people said.

Intel, which employs more than 4,000 people in Ireland, plans to spend about $13 billion on new plants and equipment in 2013, more than analysts had projected, to help it cater to growing demand for handsets and tablets.

Singapores state investor Temasek Holdings Pte Ltd another prospective equity partner that Silver Lake has tapped is not interested in joining the consortium, sources said.

It has been almost 25 years since Dell went public, and if the deal is completed, it will be the largest leveraged buyout in some years. (Additional reporting: Reuters/Bloomberg)

CIARA OBRIEN

I dont think things will get better in PCs, said Cody Acree, an analyst at Williams Financial Group in Dallas. For growth in the PC market this year.

Dell also has formed a special committee to take a close look at any potential deal on the table, multiple sources told Reuters.

Sales at Intel are expected to ll for the third straight quarter, as the company continues to struggle in a changing industry that has seen a definite swing towards mobile devices.

Sales in the current period may decline, Intel said, how to apply to downey adult school lvn ndeed.com after reporting a 3 per cent drop last quarter. That followed a 5 per cent decline in the September quarter.

Intel Ireland, meanwhile, is expected to play a role in manucturing new chips. Last month general manager of Intel Ireland Eamonn Sinnott said the Irish operation is still on the roadmap for the 14 nanometre chip, with Arizona already announced as a manucturing location.

You keep going until you stop, and when you stop you die. Pink Floyds Roger Waters remains as restless today as ever, writes Ronan McGreevy

However, tumour4339.typepad.com its data centre group saw revenue rise by 7 per cent quarter on quarter to $2.8 billion, a year-on-year rise of 4 per cent.

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There is no delay, there is no change, he said. Paul Otellini has identified Ireland as being on the 14nm and beyond roadmap. There is no change to that. But the investment in new capabilities wont quickly help the California-based company compensate for diminishing demand for PCs.

According to its latest results, revenue from its PC client group revenue fell by 1.5 per cent to $8.5 billion in the fourth quarter of last year. Year over year, that was a 6 per cent drop.

The flag protests in Belst have put many people off coming in to the city to shop and socialise, but business ownersare coming up with ways to keep their doors open

The company has been hit by a ll in the demand for PCs, an industry in which it has dominated for several years, and a ilure to gain a foothold in the mobile and tablet markets.

A recent surge in prisoner numbers has made Irish jails more over crowded and dangerous than ever. A new series examines our broken prison system,Intel reports lling sales figures equity finance.

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