Monday, the U.S. marked its first tech IPO of 2016 with Dell’s SecureWorks. The Atlanta-based company is eager to hit tickers across the globe and trade towards its potential $1.42 billion valuation. While the dive into volatile market waters could prove risky, SecureWorks hopes to breach the surface with a $154 million dollar raise.
In order to live up to its forecasted reputation, SecureWorks will bring power to the people at the cost of Class A stock between $15.50 and $17.50 a pop. As the security firm makes its market debut, many may assume the company hails from Silicon Valley or near Dell’s headquarters in Texas, but they’ll need to look farther east. Here in Georgia, not only are we one of the top three states for information security, we also generate more than 25% of the worldwide security revenue market share.
SecureWorks was first acquired by Dell back in 2011 for $612 million and is among the city’s distinguished security companies, which predecessors include ISS and CipherTrust. While SecureWorks has generated revenue increases over the last several years, its recently reported year-end fiscal losses rang in at a whopping $72.4 million. However, the silver lining is this new public playground, which could give the security firm the stamina it needs to fill in its debt grave and build from the ground up.
Dell, too, has seen itself on the slippery slope of sizeable debt. Some assume that the SecureWorks public offering would help pay off some of those billions, but after trudging through the S-1 filing, Dell stated that they do not intend to transfer net proceeds to Denali, Dell, or any of their respective affiliates. Perhaps they’re hoping to work it off by saying bon voyage to Perot for $3.1 billion, while also attempting to convince constituencies that the $67 billion acquisition of EMC – the largest in tech history – is still a viable – and ultimately lucrative – deal worth closing.
With SCWX scrolling on the NASDAQ, SecureWorks will hopefully rise as an information security superhero. Net proceeds of the IPO will fuel SecureWorks’ operating capital and other corporate purposes. This includes financing growth, research, and development on their current solutions, funding capital expenditures, and, of course, future investments and acquisitions as a complimentary side dish to their existing offerings.
We’ll just have to sit back and see if shareholders agree.