By Telis Demos and Dana Cimilluca

Updated Oct. 9, 2015 1:03 p.m. ET

Dell Inc. has filed confidentially for an initial public offering of its cybersecurity unit, Dell SecureWorks Inc., as the personal-computer maker plots a dramatic reshaping of itself.

The software and consulting firm, which Dell acquired in 2011, filed papers for the IPO over the summer and has been working with banks including Bank of America Corp. and Morgan Stanley and on the potential deal, according to people familiar with the matter. The roadshow to market the stock to investors could launch as soon as December, they added—meaning the stock could start trading around the end of the year. The business could be worth as much as $2 billion, though the target valuation isn’t yet finalized, some the people said.

Separating out SecureWorks is part of a broader strategic rethinking at the company founded by Michael Dell in a dorm room in 1984. Dell went private in a roughly $25 billion buyout by Mr. Dell and private-equity firm Silver Lake in 2013. The two are now in advanced negotiations to acquire data-storage giant EMC Corp. for more than $50 billion, according to people familiar with the matter. SecureWorks is now less of strategic fit with Dell’s other offerings, which include servers, storage and networking gear, one of the people said.

Under the 2012 Jumpstart Our Business Startups Act, companies with annual revenue of less than $1 billion are allowed to make a secret IPO filing with the Securities and Exchange Commission. They must lift the veil on the filing at least 21 days before the roadshow begins.

Dell isn’t expected to sell any of its ownership in SecureWorks in the IPO, the people said. The offering will raise money for SecureWorks by bringing in outside investors and potentially paving the way for future acquisitions, some of the people said.

SecureWorks sells managed-security services, online tools that companies can use to keep tabs on their network activity and prevent hackers from breaking into their computer systems.

Dell bought SecureWorks for $612 million, looking to beef up its services business and expand beyond its core computer hardware offerings. Since then, SecureWorks has continued to operate as a discrete unit within Dell.

Recently, security has become one of the hottest investments for venture-capital firms, producing a string of successful IPOs, including Rapid7 Inc., which is up 52% since its July IPO, and CyberArk Software Ltd., up 233% since its debut in September 2014, and that has likely encouraged Dell to pursue the move. Meanwhile, Internet and other tech IPOs have struggled, with tech IPOs this year representing the smallest share of the U.S. IPO market since 2008.

“Cyber security has been one of the bright spots in the tech food chain,” said Daniel Ives an analyst with FBR Capital Markets.

—Robert McMillan contributed to this article.

Write to Telis Demos at and Dana Cimilluca at


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