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Dell plans to IPO a company it bought for $612 million and make it worth $1.4 billion

Eugene Kim
Michael Dell

(Oracle PR/Flickr)
Dell CEO Michael Dell

Dell plans to spin off SecureWorks, the security firm it bought for $612 million in 2011, in an IPO that would give the business a market cap of $1.4 billion, according to new regulatory filings submitted to the SEC on Monday.

The documents said that SecureWorks would sell shares in the range of $15.50 to $17.50 a share. At the high end of the range, SecureWorks would be worth roughly $1.4 billion once it goes public.

The filings said that the company expects to raise between $134.3 million to $154.9 million from the IPO. But it stressed that Dell won't transfer any of the proceeds to its affiliates, meaning it won't be used to pay for Dell's massive $67 billion acquisition of EMC.

SecureWorks generated $339.5 million in revenue last year, up from $262.1 million the year before. It had a gross margin of $155.7 million last year, but posted a net loss of $72.3 million.

The company is almost entirely owned by Dell CEO Michael Dell, who gained it himself when he took Dell private in 2013. SecureWorks makes cybersecurity software that helps companies monitor their IT infrastructure to protect against hackers and malware. 

Besides SecureWorks, Dell has been shopping around other units like its SonicWall security business and Quest Software for a reported $2 billion each, and its outsourcing business, Perot Systems, for a reported $5 billion.

In February, Dell was given the FTC's greenlight to proceed with its planned $67 billion acquisition of EMC. If completed, the deal will be the largest pure-tech merger in history.

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