Dive Brief:
- Dell SecureWorks priced its initial public offering of stock at $15.50 to $17.50 per share on Monday, according to filings with the Securities and Exchange Commission.
- The cybersecurity firm announced last week that it planned to launch its IPO this month. The company makes software that helps enterprises moniter their infrastructure and protect against malicious activity.
- During its initial public offerings, the company could raise up to $181.1 milllion, according to SEC filings. Market analysts say that SecureWorks could be valued at as much as $1.5 billion.
Dive Insight:
The company had targeted a valuation of $2 billion last summer, but a weakening of the market has caused valuation expectations of many tech companies, particular cybersecurity companies, to decline.
In recent months, cybersecurity firms including Imperva, Fortinet and FireEye Inc. have suffered in the stock market. Analysts say high-profile data breaches drove security spending up in 2015, making cybersecurity company valuations too high. As a result, many cybersecurity firms have recently seen their valuations plummet.
SecureWorks representatives say they plan to use proceeds from the IPO to bolster the business, rather than shifting them to parent company Dell, which is currently focused on finalizing its purchase of EMC.
Currently, SecureWorks doesn’t make a profit. The company generated $339.5 million in revenue last fiscal year, up 30% from the year prior, according to a securities filing. But its net loss of $72.4 million was nearly twice as high over the same period.
If the planned IPO comes through, SecureWorks would be the first tech IPO of 2016. No other tech firms have listed shares in the U.S. since a Chinese firm did so in December.
