Dell Inc. could issue an initial public offering of stock this month for its cybersecurity business unit SecureWorks, according to media reports.
Dell Inc.'s parent company, Denali Holding, in December filed paperwork with the U.S. Securities and Exchange Commission saying it planned to take SecureWorks public, but the Round Rock-based technology giant did not say when that IPO might happen.
The Wall Street Journal, citing unnamed sources, reported that the IPO would happen this month and raise as much as $150 million.
A move to take SecureWorks public would come as Dell Inc. looks to raise capital and shed debt ahead of its planned $67 billion acquisition of EMC Corp.
The EMC deal is expected to create as much as $49 billion in debt for Dell Inc., according to reports from the Wall Street Journal and other media outlets.
Dell Inc. last week said it has agreed to sell its IT services division to Japan-based NTT Data Corp. for just over $3 billion. Dell's IT services division, known as Dell Services, was formerly known as Perot Systems, a company founded by former U.S. presidential candidate Ross Perot. Dell bought it in 2009 for $3.9 billion at a time when it was working to expand beyond its core business of personal computers.
The moves would enable Dell Inc., the largest private employer in Central Texas, to raise cash to help make its EMC deal work, industry analysts say.
Dell Inc. acquired SecureWorks in 2011 for $612 million. Based in Atlanta, SecureWorks provides intelligence-driven information security solutions focused on protecting its clients from cyberattacks. The business unit had revenue of $245.4 million for the nine months ended Oct. 30 and had a net loss of $57.5 million in that same time period, according to securities filings. As of Oct. 30, SecureWorks had 2,013 full-time employees, according to securities filings.
SecureWorks plans to trade on the Nasdaq exchange, using the symbol SCWX.
Even after the offering is completed, Denali Holding - the holding company controlled by Dell Inc. founder and CEO Michael Dell and private equity firm Silver Lake Partners - will maintain control over SecureWorks.
"Denali will continue to control us following this offering, and will be able to exercise control over all matters requiring approval by our stockholders, including the election of our directors and approval of significant corporate transactions, " SecureWorks said in a securities filing. As of Oct. 30, Michael Dell controlled 71 percent of SecureWorks, while Silver Lake had a 24 percent ownership stake, according to securities filings.
Dell Inc. announced plans to buy data storage giant EMC in October. The deal, which also involves Dell investment partner Silver Lake, would be the biggest information technology merger in history if completed.
The deal would cement Dell Inc.'s shift from hardware, such as PCs, to the more profitable areas of data storage and other business services. Since going private in 2013 in a $25 billion deal, Dell Inc. has been investing in research and development and expanding its software and services businesses as those in the technology industry continue to struggle with soft PC sales.
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