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Dell is weighing a sale of SecureWorks: Reuters
Posted on Friday, 08 February 2019 15:03
In the latest in a string of cyber security deals, Dell Technologies is considering a sale of SecureWorks, just three years after the group went public, Reuters reported, citing people familiar with the matter.
According to these sources, the potential target is working with investment bank Morgan Stanley on the divestment process, which is still in the early stages.
Dell is looking to cut its USD 50.00 billion debt pile, Reuters observed, less than two months after the computer manufacturer became publicly-traded following its USD 23.90 billion deal to buy back shares in VMware in December.
Shares in SecureWorks closed up slightly to USD 23.72 yesterday, valuing the business at around USD 1.94 billion.
The Atlanta-based company offers security information services to protect corporate networks from cyberattacks.
SecureWorks has some 4,300 clients in more than 50 countries worldwide and achieved a 13.6 per cent revenue growth in the third quarter of fiscal 2019.
In the nine months to 2nd November 2018, the business posted revenue of USD 388.00 million, an 11.8 per cent increase on USD 347.02 million in the corresponding period of 2017.
During the opening three quarters of fiscal 2019, the group recorded a net loss of USD 27.32 million, on adjusted earnings before interest, taxes, depreciation and amortisation of USD 7.02 billion.
Dell paid USD 612.00 million for SecureWorks back in 2011 and then floated part of the company in 2016, raising USD 112.00 million in the process.
Shares have grown over 64.0 per cent since the initial public offering, and the vendor still controls 85.0 per cent of the business.
There have been a number of significant cyber security deals that have made headlines in recent months, including CNBC reporting that Thoma Bravo is making an offer to acquire US-based security software group McAfee, which was valued at USD 4.20 billion in the 2016 majority stake sale to TPG Capital.
Virus detection company Symantec is also said to be a potential target after Reuters suggested in November that private equity groups are interested in taking the business, with a market capitalisation of USD 14.40 billion, private.
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