The Dell’s HBS Case and seeking alpha article analysis

This is a paper that focuses on the Dell’s HBS Case and seeking alpha article analysis. The paper also tries to identify what Michael is trying to do.

The Dell’s HBS Case and seeking alpha article analysis

Questions
Refer to Dell’s HBS Case and Seeking alpha article attached.

1.  Firstly, what is Michael Dell trying to do? Explain briefly what has led Michael Dell to pursue a take-private transaction on the company? Who are his supporters in this and who are against him doing this?
2.   Secondly, how much will it cost him to do the buyout? To purchase all the remaining shares outstanding? Who else are participating in this transaction?
3.   Thirdly, draw a table of pre-transaction and post-proposed transaction capital structure. Where are all the funds (debt, equity and cash) to execute the transaction coming from?
4.A Fourthly, what are pre and post-LBO leverage and coverage ratios? Use latest estimates provided by Dell in the HBS case.
4.B Also, what has Michael Dell’s equity ownership gone to? From pre to post LBO?

5. If Dell continues on the path laid out by Michael Dell – in terms of sales growth, EBITDA growth would all the participants want to take the company public again? If Dell did go public again in 5 years, what could its Sales, EBITDA and Free Cash Flow generation be in 5 years? At these levels of Sales and FCF what Total Enterprise Value and Market Value of Equity could Dell be valued at an IPO 5 years out? Lastly, at this valuation determine what each capital participant’s return on investment be in an IPO or sale in 5 years?

Dell continues on the path laid out by Michael Dell – in terms of sales growth, EBITDA growth would all the participants want to take the company public again? If Dell did go public again in 5 years, what could its Sales, EBITDA and Free Cash Flow generation be in 5 years? At these levels of Sales and also FCF what Total Enterprise Value and Market Value of Equity could Dell be valued at an IPO 5 years out? At this valuation determine what each capital participant’s return on investment be in an IPO or sale in 5 years?

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