Dell plans to spin off its SecureWorks security business unit into a public company, a move believed to be part of a plan to help the company reduce debt it will incur when it buys EMC next year.
On Dec. 17, SecureWorks Corp. said it filed a registration statement on Form S-1 with the Securities and Exchange Commission (SEC) for an IPO of Class A common stock, according to a Dell press release. The initial stock price range for the IPO has not yet been determined, according to Dell.
Dell bought SecureWorks for $612 million in 2011 as part of a broader strategy to expand its business with enterprise IT solutions and services. Security was a part of that strategy, a business the company developed through acquisitions that also included SonicWall and Credant Technologies the next year.
SecureWorks will use the proceeds from its IPO for working capital and other general corporate purposes, according to Dell. However, one published report said that the IPO also could offset $49 billion in debt the company will take on when it buys EMC for $67 billion later this year. Dell has been trying to reduce the amount of debt in a number of ways, including selling assets, according to the report, published online at eWeek.
The SecureWorks business unit has more than 4,100 customers in 61 countries that use the division’s cybersecurity offerings, according to paperwork filed with the SEC. In the filing, Dell and SecureWorks officials said the cyber-security unit has more than 4,100 customers in 61 countries that are using the unit's information security offerings, which protect enterprises against cybersecurity attacks.
The business unit’s financials have seen mixed results over the past several years, according to the filing. SecureWorks has had steady revenue growth since 2013 but also experienced net loss during the same time period. In fiscal year 2015, for example, SecureWorks revenue grew 27 percent, from $205.8 million in 2014 to $262.1 million., according to the filing. In the same year, however, the business unit lost $38.5 million.