Dell's SecureWorks Security Unit Heading for IPO

 
 
By Jeffrey Burt  |  Posted 2016-04-12 Print this article Print
 
 
 
 
 
 
 
tech business

The business could be valued at as much as $1.4 billion after it goes public, according to a document filed with federal regulators.

Dell is spinning out its SecureWorks cyber-security business in the first IPO of the year.

In a filing with the Securities and Exchange Commission (SEC) April 11, SecureWorks officials said they expect to raise $134.3 million to $154.9 million, with the per-share price ranging between $15.50 and $17.50. The company could be valued at as much as $1.4 billion after the initial public offering, the officials said.

The new company will trade on the Nasdaq exchange under the symbol SCWX.

The notice that the company plans to go public follows months of speculation, and comes as Dell prepares to buy data storage vendor EMC for $67 billion, by far the largest acquisition in the tech industry. Dell will remain the largest shareholder in SecureWorks, but officials in the SEC filing said there are no plans to transfer any of the funds raised through the IPO to any other companies, which means none of the proceeds will be used to help Dell fund the EMC acquisition or pay off any of the debt.

Dell has wholly owned SecureWorks since 2013, when Michael Dell took his company private in a $25 billion buyout.

Dell bought SecureWorks in 2011 for $612 million, part of CEO Michael Dell's larger multi-year effort to transform his namesake company from a PC maker to a more complete enterprise IT solutions and services provider. The company has spent billions to acquire companies to help Dell build out its capabilities in such areas as storage, networking, security, software and the cloud.

SecureWorks provides a range of offerings—including managed security services, threat intelligence, incident response and consulting—designed to help businesses protect themselves against hackers and security threats. The company has more than 4,200 customers in 59 countries and analyzes as many as 160 billion security events a day through its Counter Threat Platform.

Company officials also said they have an aggressive growth strategy that includes expanding the customer base and investing in R&D efforts.

The company since 2013 has seen significant growth, officials said. The number of customers has increased 31 percent and the number of employees has risen from 1,036 to 2,047. At the same time, SecureWorks has seen revenues grow, from $262.1 million in 2014 to $339.5 million last year. However, losses also have increased from $38.5 million two years ago to $72.4 million last year.

Since announcing the $67 billion bid to buy EMC and its federated companies—including VMware, RSA, Pivotal and VCE—in October 2015, Dell officials have sought ways to reduce the expected $50 billion or so in debt that the company will take on. Company officials last month said they were selling Dell's services business—which was gained primarily through the $3.9 billion acquisition of Perot Systems in 2009—to NTT Data for more than $3 billion.

In addition, Dell also is reportedly shopping around its SonicWall network security and Quest software businesses, putting a price tag of $2 billion on each. The tech vendor reportedly wants to sell the two businesses together, and private equity firms and other companies have shown interest.

At the same time, Dell and EMC reportedly are looking to sell EMC's Documentum content management division. EMC bought Documentum in 2003 for about $1.7 billion.

 

 
 
 
 
 
 
 
 
 
 
 
 
 

Submit a Comment

Loading Comments...
 
Manage your Newsletters: Login   Register My Newsletters























 
 
 
 
 
 
 
 
 
 
 
Rocket Fuel