Deal of the Week: to Buy EMC for $67B

Announcement Date  October 12, 2015 Acquirer  Dell Inc. Acquirer Description  Privately owned multinational technology company that develops, sells, repairs, and supports computers and related products / services  Founded in 1984 and headquartered in Round Rock, Target Company  EMC Corporation (NYSE: EMC) Target Description  Develops, delivers, and supports information infrastructure and virtual infrastructure technologies, solutions, and services  Founded in 1979 and headquartered in Hopkinton, Massachusetts Target Financial  Mkt Cap: $54.6 billion  LTM EBITDA: $5.4 billion Statistics  EV: $53.3 billion  LTM EV / Revenue: 2.2x  LTM Revenue: $24.7 billion  LTM EV / EBITDA: 9.8x Price / Consideration  Price: $67 billion  Consideration: Cash & Stock Acquirer Advisor  J.P. Morgan Target Advisor  Morgan Stanley Rationale  “The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers industry‐leading innovation across their entire technology environment,” Mr. Dell said. “Our new company will be exceptionally well‐positioned for growth in the most strategic areas of next‐generation I.T.”  Buying EMC brings Dell one of the biggest names in computer data storage, adding to existing offerings like network servers, corporate software and mobile devices  In an interview on CNBC, Michael Dell said that “the revenue synergies here are three times larger than the cost synergies.” Deal Points  Dell will pay $33.15 per EMC share, which includes $24.05 in cash plus $9.10 worth of tracking stock linked to part of EMC’s economic interest in VMware, a publicly traded business  Debt will be provided by Barclays, BofA Merrill Lynch, Citi, Credit Suisse, Deutsche Bank, Goldman, Sachs & Co., J.P. Morgan and RBC Capital Markets  EMC also has included a 60‐day “go shop” provision, which would allow it to solicit superior offers Of Note  The Dell founder and chief executive, Michael S. Dell will lead the combined company as chairman and chief executive  The deal would be the second‐largest tech merger ever, behind only the $106 billion tie‐up between AOL and Time Warner in 2000, and the largest‐ever take‐private transaction for a tech company

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