8-KLeadership ChangesAcquisitions & DispositionsMaterial Agreements+4

Dell Technologies Inc. 8-K Report, Material Agreement (Sep 9, 2016)

Filed September 9, 2016For Securities:DELL

Summary

This 8-K filing reports the consummation of Dell Technologies Inc.'s (formerly Denali Holding Inc.) acquisition of EMC Corporation on September 7, 2016. This significant transaction was financed through a combination of substantial debt facilities totaling over $21 billion, including senior secured credit facilities and various bridge facilities, as well as equity contributions. As part of the transaction, EMC became a wholly-owned subsidiary of Dell, and Dell issued a new class of common stock, Class V Common Stock, which began trading on the NYSE under the ticker 'DVMT' to track the economic performance of approximately 65% of Dell's interest in VMware. The filing also details the refinancing and termination of existing credit facilities for both Dell and EMC, the redemption of certain outstanding debt, and the assumption of certain notes by the combined entity. It outlines the new capital structure, governance changes including board appointments, and compensation arrangements for directors and executive officers, reflecting the integration of the two companies.

Key Highlights

  • 1Completion of the acquisition of EMC Corporation by Dell Technologies Inc. on September 7, 2016.
  • 2Significant debt financing secured for the merger, totaling approximately $21.775 billion across multiple credit facilities.
  • 3Issuance of Class V Common Stock (tracking stock) by Dell, intended to reflect the economic performance of Dell's interest in VMware.
  • 4Repayment and termination of existing credit facilities for both Dell and EMC.
  • 5Redemption of Dell's Old First Lien Notes.
  • 6New governance structure established with an expanded Board of Directors and executive officer appointments.
  • 7Details on equity arrangements and compensation for directors and executive officers of the combined entity.

Frequently Asked Questions

The main event reported is the completion of the acquisition of EMC Corporation by Dell Technologies Inc. (formerly Denali Holding Inc.) on September 7, 2016, and the related financing and governance changes.

The acquisition was primarily financed through a combination of new debt facilities totaling approximately $21.775 billion, including a $17.575 billion Senior Secured Credit Facility and several bridge facilities ($2.2 billion Asset Sale Bridge Facility, $2.5 billion Margin Bridge Facility, and $1.5 billion VMware Note Bridge Facility), alongside equity contributions and existing cash.

The Class V Common Stock is a type of 'tracking stock' issued by Dell Technologies Inc. as part of the merger consideration. It is intended to track and reflect the economic performance of approximately 65% of Dell's interest in the 'Class V Group,' which primarily consists of Dell's economic interest in VMware. It began trading on the NYSE under the ticker 'DVMT'.

In connection with the merger, Dell repaid and terminated its old asset-based revolving credit facility and term loan facilities. EMC also repaid and terminated its revolving credit facility. Additionally, Dell's Old First Lien Notes were redeemed.