Dell explores potential sale of SecureWorks once again after previous failures

Dell reconsiders SecureWorks sale: Dell Technologies is revisiting the prospect of selling its cybersecurity arm, SecureWorks, following earlier unsuccessful attempts, according to a Reuters report.

Dell, headquartered in Round Rock, Texas, and led by CEO Michael Dell, has engaged investment banks Morgan Stanley and Piper Sandler to explore potential acquisition interests from private equity firms and other buyers. Discussions are ongoing and remain confidential.

Sale still uncertain

The sale of SecureWorks, currently valued at approximately $658 million, is not certain. Dell might decide to retain ownership of the firm.

Dell, having reduced its non-core assets in recent years, holds 79.2 per cent of SecureWorks through class B shares and controls 97.4 per cent of the company's voting stock with these dual-class shares.

Previously, Dell considered selling SecureWorks in 2019 as part of a strategy to reduce its debt load, as reported by Reuters.

Founded in 1998 and based in Atlanta, SecureWorks specialises in cybersecurity services designed to defend against cyber threats. Its flagship platform, Taegis, is a cloud-based solution aimed at identifying advanced threats.

SecureWorks’ decline, Dell’s growth

Dell originally acquired SecureWorks for $612 million in 2011 and later took the company public in New York in 2016.

Since reaching a peak in September 2021, SecureWorks' share value has plummeted by over two-thirds due to increasing competition and challenges in differentiating its services from larger cybersecurity firms.

Meanwhile, Dell has benefited from a surge in investor interest in artificial intelligence, with strong demand for its AI-focused servers. Dell's stock has surged approximately 46 per cent this year, outperforming the S&P 500's 18 per cent gain.

SecureWorks is set to release its second-quarter financial results on September 5.


(With Reuters Inputs)