Dell Technologies on Monday confirmed that it had reached an agreement to take the company public again on the New York Stock Exchange as part of a share swap with its DVMT VMware software business tracking stock.
Dell plans to exchange each share of the DVMT tracking stock for 1.3665 shares of Dell Technologies common stock for US$109 per share.
Dell said the price represented a 29 percent premium to the DVMT share closing price and gives the shareholders the "opportunity to participate in Dell Technologies" future value creation.
As part of the deal, VMware's board of directors has approved a one-time special dividend to all VMware shareholders worth US$11 billion.
Dell Technologies' share of the dividend will be approximately US$9 billion which the company said it intends to use to finance the cash payment to DVMT shareholders with the remainder, if any, being used to pay down debt.
VMware said it would remain an independent, publicly listed software company, with "improved alignment between Dell’s economic and ownership interests" in VMware.
"I am proud to lead this great company into its next chapter as we continue to evolve and grow to the benefit of our customers, partners, investors and team members," said Dell founder and chairman Michael Dell, who owns 72 percent of Dell Technologies' common stock.
"Unprecedented data growth is fueling the digital era of IT, security and workforce transformations of our customers. Most importantly I remain deeply committed to this company and working with our world-class team to build the long term value of Dell Technologies and its businesses."
Private equity behemoth Silver Lake, which partnered with Michael Dell to take Dell private in the largest private equity buyout in technology industry history, said it would maintain its entire 24 percent stake in Dell Technologies as part of the transaction.
"We are grateful to Michael and his management team at Dell Technologies and VMware for their extraordinary performance that has preceded this transaction, which will enable the company to continue on its accelerating growth trajectory," said Egon Durban, managing partner and managing director of Silver Lake.
"We are excited that public investors will share in Dell Technologies' dynamic value creation with Silver Lake, which has no plans to seek liquidity and remains an enthusiastic long-term shareholder."
Durban said Dell Technologies has the "most complete and richest portfolio of technology assets spanning all aspects of digital and IT transformation and is strategically positioned to take full advantage of the new era of emerging technology trends including IoT, AI, machine learning, 5G, cloud computing and mobility".
The transaction is expected to close in the fourth quarter.