Bain’s Pagliuca Says LBO Good for Dell Transformation

Stephen Pagliuca, a managing director at Bain Capital LLC, said going private would help Dell Inc. (DELL) as it seeks to cut its reliance on personal computer sales.

“When companies are undergoing some transformation -- slow growth, new products -- it’s really hard to be public,” Pagliuca said today in an interview with Bloomberg Television’s Erik Schatzker at the World Economic Forum in Davos, Switzerland. As a public company, “you have to make the earnings every quarter, so becoming private is probably a good thing for Dell,” Pagliuca said.

Dell, the third-biggest maker of personal computers, is getting closer to clinching a leveraged buyout with private- equity firm Silver Lake Management LLC, and Microsoft Corp. is planning to provide part of the funding, people with knowledge of the matter said yesterday.

Michael Dell, chief executive officer of the Round Rock, Texas-based company he founded, has been using acquisitions to sell more products to businesses as consumers shun PCs in favor of tablets and smartphones, including devices that run Apple Inc. and Google Inc. software that competes with Microsoft Windows.

Pagliuca joined Boston-based Bain in 1989 and focuses on investments in technology, media, telecommunications and financial services. Bain oversees $67 billion in assets.

To contact the reporter on this story: Devin Banerjee in New York at dbanerjee2@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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