Dell’s SecureWorks Prices IPO

On Monday, security software provider SecureWorks filed an amended Form S-1 with the U.S. Securities and Exchange Commission (SEC) pricing its planned initial public offering (IPO) of 9 million class A shares in a range of $15.50 to $17.50 per share. At the mi-point of the range, the company would realize gross proceeds of $148.5 million.

Dell acquired SecureWorks in 2011 for $612 million and is conducting an IPO to help it raise cash for Dell’s pending acquisition of EMC Corp. (NYSE: EMC). Dell needs to close a financing gap of $10 billion for the EMC deal, according to The Wall Street Journal.

The joint bookrunners for the offering are Bank of America Merrill Lynch, Morgan Stanley, Goldman Sachs, JPMorgan, Barclays, Citigroup, Credit Suisse, RBC Capital Markets and UBS Investment Bank. Co-managers include Pacific Crest, Stifel, Suntrust Robinson Humphrey and William Blair. The underwriters have an overallotment option on 1.35 million additional shares. If the overallotment option is exercised, gross proceeds at the midpoint of the expected range would total about $171 million. At the high-end of the range, SecureWorks could realize gross proceeds of about $181 million.
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SecureWorks has adopted a dual-class share structure, and Denali Holding, the parent company of Dell, will own all the class B shares, which represent about 86.1% of all outstanding shares and 98.4% of all voting power. If the underwriters exercise their overallotment options, Denali will own about 84.7% of the company’s shares and hold 98.2% of the voting power.

No date has been set for the IPO, which could value SecureWorks at about $1.5 billion if the offering goes out at the high end of the range.

Shares will trade on the Nasdaq under the ticker symbol SCWX.