Dell's Cybersecurity Unit SecureWorks Plans IPO

Dells 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 regulatoryfilingon 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. Dells Chairman and CEO Michael Dell, and Silver Lake managing partner Egon Durban will serve on the companys board of directors.

DellacquiredSecureWorks in 2011 for $612 million. In July, theAtlanta Business Chroniclereportedthat Dell was looking to spin out the security company from its portfolio.

The IPO filing follows Dells 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-calledfederation 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 companys third quarter, which is a 32 percentincrease 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 percentincrease from the $8.8 million in recorded in the previous year.

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

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