Dell Makes Controversial Purchase of MessageOne

By
Real Estate Agent with One Source Realty

The business world is rumbling over Dell’s recent purchase of MessageOne. The reason? MessageOne just happens to be owned by Michael Dell’s little brother, Adam. In addition, through a whole mess of investment funds, Dell’s parents and Adam’s wife and children are also part owners of MessageOne.

Knowing the ownership of MessageOne makes it a little easier to understand why some people in the business world are scratching their heads about the $155,000,000 buyout. Was this really a smart business move on behalf of Dell, or was it simply a scheme to keep all the money in the family?

On the surface, it seems that the transaction was all on the up and up. Adam Dell wasn’t involved in the acquisition and he only stands to make close to $1 million on the buyout. Dell’s parents will be making around half a million dollars, and the $12 million that is going to the personal family trust is being donated to charity. Nonetheless, in a day and age when business executives seem to be routinely bending and twisting laws and regulations to suit their needs, it is understandable why so many are wondering if this transaction was really as innocent as it seems.

Perhaps the biggest question mark associated with the transaction is the fact that the purchase doesn’t really seem like a necessary one. Most business analysts are having a difficult time understanding how MessageOne, which is a provider of email management services, really fits into the Dell business scheme.

Still, MessageOne does report that it made somewhere around $40 million last year and Dell certainly has the marketing power to take the service to a whole new level. And, let’s not forget that it is not unusual for successful companies in the technology field to branch off into other areas. After all, Google recently coughed up $600 million to purchase Postini, which provides email filtering services.

Whether or not it was truly a clean deal will remain to be seem. As the CEO of corporate ethics consulting firm Corpedia, Alex Brigham, put it “You would think [Dell’s] parents might have [also donated the proceeds to charity]. And Adam, too. Then the deal would have been much cleaner and smelled much better.”

 

 

Eric Bramlett is the broker & co-owner of One Source Realty in Austin, Texas. Eric currently manages his Austin Real Estate website, his Austin Texas real estate company's website, & his Austin Lofts website.
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A quick lesson on how do you get around the SEC rules about cashing out of the stock options I see... This is a very interesting story.  
March 28, 2008 12:40 AM #1
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