A Dell Family Reunion: Ticket $165m

Is Michael Dell rescuing his little brother, or does Dell (Nasdaq: DELL) spending $165 million to buy email continuity firm MessageOne make sense? MessageOne has a good product, but without the sexy security component offered by Postini or FrontBridge, buyers never picked up the 10-year-old company. So the deal has more than a hint of nepotism.

Adam Dell was a co-founder, the former chairman and a financial backer of MessageOne. A filing with the SEC points out that many Dells stand to gain from the transaction, thanks to $45 million that will go to Adam Dell’s venture funds:

• Impact Venture Advisors (wholly owned by Adam Dell) is expected to receive approximately $966,000 ($904,000 attributable to its interest in Impact Venture Partners and $62,000 attributable to its interest in Impact Entrepreneurs Fund)
• Michael Dell, Susan Dell and their children’s trust are expected to receive collectively approximately $12 million ($10.7 million attributable to their interest in Impact Venture Partners and $1.3 million attributable to their interest in Impact Entrepreneurs Fund)
• Mr. Dell’s parents are expected to receive approximately $450,000 (all attributable to their interest in Impact Entrepreneurs Fund).

Michael and Susan Dell have indicated that the proceeds which they and their children’s trust receive from the acquisition will be donated to charity.

When you’re Michael Dell, the money isn’t everything, but helping a brother get rid of a 10-year-old drag on the portfolio might count as a favor. But MessageOne fits with Dell’s efforts to offer more managed services, so sometimes a little nepotism isn’t all bad.

Comments

[Tom B:]

Tell that to the remaining stockholders.

2008 Feb 12 12:12 PM