Dell

Dell's Cybersecurity Unit SecureWorks Plans IPO

2 min read
This story originally appeared on Fortune Magazine

Dell’s cybersecurity business unit SecureWorks is planning an initial public offering.

The Atlanta, GA.-based company said it would trade on NASDAQ under the stock ticker SCWX, according to a regulatory filing on Thursday. SecureWorks did not disclose the price of its shares or the number available.

It said it plans to raise $100 million from the stock sale, but that amount was likely just a placeholder.

Denali Holding Inc., the parent company of Dell, will maintain a large stake in SecureWorks, thus making it a “controlled company” under NASDAQ marketplace rules, the filing said. Dell’s Chairman and CEO Michael Dell, and Silver Lake managing partner Egon Durban will serve on the company’s board of directors.

Dell acquired SecureWorks in 2011 for $612 million. In July, the Atlanta Business Chronicle reported that Dell was looking to spin out the security company from its portfolio.

The IPO filing follows Dell’s recently announced plans to acquire business technology giant EMC for nearly $67 billion. The deal is intended to make Dell more competitive in corporate technology against giants like Hewlett-Packard Enterprise and Oracle as well as specialists in cloud computing like Amazon and Microsoft.

EMC controls six independent businesses under a so-called federation model, including data storage company EMC II and data center software company VMware (VMW -1.50 percent). It also owns the security company, RSA Security, which competes with SecureWorks.

SecureWorks brought in $88 million in sales in a three-month period in the company’s third quarter, which is a 32 percent increase from the $67 million it brought in the previous year during the same period.

The company had a net loss of $18.5 million for the three-month period in the third quarter, which was a 111 percent increase from the $8.8 million in recorded in the previous year.

Bank of America Merrill Lynch, Morgan Stanley, Goldman Sachs, JPMorgan, Barclays Capital and Citigroup Global Markets are among the several underwriters for SecureWorks’s IPO. Bank of America is SecureWorks biggest customer, accounting for 12 percent of the company’s revenue in 2015, according to the filing.

More from Entrepreneur

Kathleen, Founder and CEO of Grayce & Co, a media and marketing consultancy, can help you develop a brand strategy, build marketing campaigns and learn how to balance work and life.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Starting, buying, or growing your small business shouldn’t be hard. Guidant Financial works to make financing easy for current and aspiring small business owners by providing custom funding solutions, financing education, and more.

Latest on Entrepreneur