Dell Technologies, the tech giant specializing in personal computers, is once again exploring the market for a possible sale of SecureWorks, its cybersecurity subsidiary, according to sources close to the matter.
New sales attempt
This is not the first time Dell has considered selling SecureWorks. In 2019, the company already explored this possibility as part of a strategy to reduce its debt. However, the attempt was unsuccessful at that time.
Operation details
Dell has hired investment banks Morgan Stanley and Piper Sandler to evaluate the interest of potential buyers, including private equity firms. SecureWorks, based in Atlanta, Georgia, currently has a market value of approximately $800 million.
Dell’s involvement in SecureWorks
Dell owns 79.2% of SecureWorks, controlling all of the company’s class B shares. Through this dual share structure, Dell controls 97.4% of SecureWorks’ voting rights.
Market reaction
After Reuters exclusively reported this information, SecureWorks’ shares experienced an increase of up to 34%, although they later moderated their gains.
SecureWorks profile
Founded in 1998, SecureWorks offers security services designed to protect corporations against cyber attacks. Its flagship cloud-based platform, Taegis, specializes in detecting advanced threats.
Context and challenges
Dell acquired SecureWorks in 2011 for $612 million. In 2016, SecureWorks went public in New York. SecureWorks’ shares have lost more than two-thirds of their value since their peak in September 2021. The company has faced difficulties competing and differentiating its offerings from larger cybersecurity providers.
Dell’s current situation
While considering the sale of SecureWorks, Dell is experiencing significant growth driven by the demand for AI-focused servers:
– Dell’s shares have increased by approximately 46% so far this year.
– This performance exceeds the 18% increase in the S&P 500 index in the same period.
Next steps
Although options are being explored, sources indicate that there is no guarantee of a sale being finalized. Dell may choose to maintain ownership of SecureWorks. SecureWorks is expected to release its second-quarter results on September 5, which could shed more light on its financial situation and future prospects.
Source: Reuters.