Strong growth but increasing losses reported as Dell continues EMC-deal corporate shuffle
SecureWorks, the security company Dell bought for $612 million in 2011, is getting put up for an IPO.
Whilst Dell hasn’t disclosed how much it wants to make from the IPO (the SEC paperwork can be seen here), Wall Street Journal sources said that it may be angling for as much as $1 billion.
“We intend to use the net proceeds we receive from this offering for working capital and other general corporate purposes,” SecureWorks said.
The IPO comes at a busy time for Dell. The $67 billion Dell-EMC deal is still playing out, with added confusion coming with the u-turn VMware, which is mostly owned by EMC, made regarding the VirtuStream cloud venture. This brings questions as to how Dell itself and VMware are going to work together.
Out of all this, SecureWorks, which was bought before Dell went private in the first place, will now be the division spun out.
There are problems though, and they come in the form of SecureWorks’ financial figures. Whilst the company can show revenue rise, up to $245.4 million in the first three quarters 2015 from $190.7 million in the same period last year, its losses have also climbed. SecureWorks posted $29.5 million losses in the first three quarters of 2014, rising to $57.5 million in the same period this year. Much of those losses can be attributed to a boost in sales and marketing efforts.
SecureWorks filed with a placeholder value of $100 million, a fee that will change after fees are calculated properly. The firm will sell its Class A common stock to the public, whilst Denali, Dell’s holding company, will own its Class B stock.