SecureWorks Said to Sell Fewer Shares in IPO, Below Price Range

SecureWorks Corp., the cybersecurity company owned by Dell Inc., sold fewer shares than originally marketed in its initial public offering, pricing the stock below the deal’s planned range, according to a person familiar with the matter.

The company sold 8 million Class A shares for $14 apiece, said the person, who asked not to be identified because the matter is private. SecureWorks had initially marketed 9 million shares for $15.50 to $17.50 each. The shares will start trading Friday, listed on the Nasdaq Stock Market under the symbol SCWX.

SecureWorks raised a total of $112 million for working capital and other uses, including developing new products and possible acquisitions of businesses or technology.

The share sale marks the first U.S. technology IPO of the year. Across industries, only 12 companies had gone public in 2016 before today, excluding special purpose acquisition companies, closed-end funds and real estate investment trusts, according to data compiled by Bloomberg. That’s the slowest pace since the financial crisis.

The SecureWorks IPO won’t necessarily spark a crop of listings from Silicon Valley’s so-called unicorns -- the tech startups valued at more than $1 billion who typically raise million of dollars from venture capitalists. That’s because SecureWorks is a more mature, slow-growth company that doesn’t fit the profile of the attention-grabbing startups, according to Kaylan Tildsley, a partner at Triton Research.

SecureWorks was a wholly owned subsidiary of Dell and Dell’s parent, Denali Holding Inc. Following the IPO, Denali will own all outstanding shares of SecureWorks’ Class B common stock, representing about 86 percent of total outstanding common shares, and about 98 percent of the combined voting power, according to the prospectus. In October, Dell agreed to buy EMC Corp. for about $67 billion in the largest technology acquisition ever.

For the year ended Jan. 29, SecureWorks posted a loss of $72.4 million on net revenue of $339.5 million. That compares with a loss of about $38 million in the year-earlier period, on net revenue of $262 million.

Bank of America Corp., Morgan Stanley, Goldman Sachs Group Inc. and JPMorgan Chase & Co. are leading the offering.

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