Tuesday, February 5, 2013

The Dell Buyout Dealmaker

Michael Ovitz's connection to Dell Buyout Dealmaker
So just who is Egon Durban?  A 39 year old managing partner at private equity firm Silver Lake Partners, Durban was the chief dealmaker behind the $24.4 billion dollar deal taking computer company Dell private.  Today's Financial News covers Durban in its story, The Hidden Dealmaker Behind the Dell Buyout, and his past includes interesting connections to Michael Ovitz.

It turns out that Durban's largest deal before today's Dell blockbuster was the purchase of a ' majority stake in video calling company Skype for just over $2bn in cash and loans, including $975m from the private equity firm's funds. When Microsoft agreed 18 months later to buy Skype for $8.5bn, the deal made Silver Lake and other Skype investors a multi-billion dollar profit.'  One of the major players in this purchase was venture capital firm Andreessen Horowitz.

We've talked here before about how Marc Andreessen and Ben Horowitz created their business culture by modeling it after Ovitz's approach at his Hollywood talent agency CAA (Creative Artists Agency).  The firm aimed to 'flip the venture industry on its head by acting more like a talent agency' and worked closely with Ovitz, who shared his secrets with the two partners when they served together on Opsware's board from 2000 to 2007.

Thus just as the job of CAA agents is to serve their clients, Andreessen Horowitz employs partners whose job is to serve the entrepreneurs.  'Instead of book and movie TV deals, the partners, each specialists in their fields, find engineers, designers, and product managers; the best marketing and public relations; and relationships with key customers...'

While Andreessen, a board member of Dell rival Hewlett Packard, declined to discuss the potential Dell buyout, he did discuss Durban's past with the Skype deal, including the straight shooting approach of 'deal junkie' Durban, who delivered news of the Skype sale "like a cold shot of vodka." 

The connection to Ovitz doesn't end with Andreessen Horowitz.  Known to 'conduct meticulous research on potential deal targets', when Durban was researching investing in Hollywood talent agency William Morris Endeavor Entertainment, he read books by Michael Ovitz and other film industry leaders.  He must have liked what he read - Durban's Silver Lake later purchased a 31% stake in WME.  

Congrats to Egon Durban and Silver Lake Partners for the Dell deal.

2 comments:

  1. Interesting that Michael Ovitz is so involved in silicon valley and VC new tech. Ovitz has stayed on top of it - kudos to him. Didn't realize the link to Andreessen Horowitz.

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