Timing of SecureWorks IPO 'may not be right' - analyst

Dell filed SecureWorks filing last night

Dell's SecureWorks arm has filed to go public, in a move one analyst suggested may not be timed right.

The security arm of Dell filed an S-1 document to the US Securities and Exchange Commission last night outlining the plans to float, but no estimated price was published on the forms.

SecureWorks was bought by Dell back in 2011 for $612m and provides ‘intelligence-driven' IT products designed to protect clients from cyberattacks.

For the three months to 30 October, SecureWorks' revenue rose almost a third (32 per cent) annually to $88.2m (£59.1m) but losses over the same period widened from $8.8m the year before to $18.5m.

Dell is currently in the process of closing a $67bn deal to acquire EMC, which will then become private under Dell ownership. When the deal was first announced, Dell said VMware will remain a public company, but under the Dell umbrella.

TechMarketView analyst Angela Eager said SecureWorks' IPO plans form "part of the wider plan" to fund Dell's mammoth EMC purchase, but added that the timing may not be spot on.

"Spinning out SecureWorks could free it to fly in the high-growth security sector but the timing may not be quite right," she said. "While its top line is growing, losses are deepening. It might have benefitted from more time to get losses moving in the right direction but the EMC timetable does not allow for that."

She added that the fast-moving nature of the security market will be good news for a public SecureWorks.

"The fragmented and diverse security supplier landscape is undergoing extensive change," she said. "The SecureWorks IPO will catch that wave of change and with its good reputation and customer base it will attract attention. The complexities, dynamics and fast pace of the security market mean it could be more successful as an independent operation than one of many Dell parts."