SecureWorks Stock Flat in Trading Debut After Reduced IPOby
Company priced shares at $14 a piece to raise $112 million
Cybersecurity company owned by Dell valued at $1.1 billion
SecureWorks Corp., the cybersecurity company owned by Dell Inc., closed unchanged in its its trading debut after selling fewer shares than originally marketed in its initial public offering at a price below the marketed range.
The company sold 8 million Class A shares for $14 apiece. The stock also closed its first day of trading at $14. That values the company at about $1.1 billion.
SecureWorks had initially marketed 9 million shares for $15.50 to $17.50 each. The shares are 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 the SecureWorks offering, 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 that 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. led the offering.