WALL STREET JOURNAL.
Dell Files Confidentially for IPO of Cybersecurity Unit
SecureWorks could begin trading by year-end and may be worth as
much as $2 billion
Dell, led by Michael Dell, filed confidentially for an initial
public offering of its cybersecurity unit, just days after it
was reported that Dell was in advanced talks over a deal for EMC
Corp. PHOTO: EUROPEAN PRESSPHOTO AGENCY
Updated Oct. 9, 2015 1:03 p.m.
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.
SecureWorks is part of a broader strategic rethinking at the company
Michael Dell in a dorm room in
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
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.
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
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.
contributed to this article.
Telis Demos at
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