English: Michael Dell speaking at Oracle OpenWorld, San Francisco 2010 (Photo credit: Wikipedia)

Dell Buyout Has Challenges

Michael Dell has clinched a Dell buyout deal and must turn a business losing ground in personal computers into one that will provide higher-margin cloud-computing services and tools. Dell needs to bundle highly profitable products like data storage and networking with the computer servers it currently has on the market.

Dell,47,will have greater freedom in personnel management and strategic growth without answering to shareholders. Michael Dell and the Silver Lake Management are taking the Round Rock, Texas-based company private in a buyout transaction valued at $24.4 billion with Dell regaining majority control of the company and remaining the chairman and CEO.

Image via CrunchBase

Dell's Debt-Laden Leveraged Buyout

Whispers from the Street: Dells Wastes Million in Buyout Plan

Many people are at a loss to explain Dell's (DELL) leveraged buyout and how exactly the math will add up in the $24.4 billion takeover bid which is the largest this side of the financial crisis.

Very few people or even analysts seem worried that the consortium group organized by founder Michael Dell, Silver Lake Partners, and Microsoft(MSFT) will not happen, even though there are concerns that a mere $13.65 per share cash payout gives only a little payment to Dell's shareholders.

Those who are shaking their heads back and forth are trying to make some sense of the numbers and are stunned after hearing that the three large rating agencies (Standard & Poors, Fitch Ratings, and Moody's) stand ready to downgrade Dell's stock to junk.