Dell attempts to sell cybersecurity firm SecureWorks again, sources say

By Milana Vinn

NEW YORK, Aug 29 (Reuters) - Personal computer maker Dell Technologies is again exploring a possible sale of SecureWorks, after unsuccessful earlier attempts to find a buyer for the U.S. cybersecurity firm, according to people familiar with the matter.

Round Rock, Texas-based Dell, founded by CEO Michael Dell, has tapped investment bankers at Morgan Stanley and Piper Sandler to gauge takeover interest from potential acquirers, which include private equity firms, the sources said, requesting anonymity as the discussions are confidential.

A deal for SecureWorks, which has a market value of about $658 million, is not guaranteed and Dell could choose to maintain ownership of the company, the sources added.

Dell, which has shed many non-core assets in recent years, owns 79.2% of SecureWorks by holding all of the company's class B shares, according to recent filings. It also controls 97.4% of the company's voting stock through the dual class shares.

Dell explored a sale of SecureWorks in 2019, part of an effort to trim Dell's debt pile, Reuters reported at the time.

Atlanta, Georgia-based SecureWorks, which was founded in 1998, offers security services that aim to protect corporations from cyberattacks. The company's flagship cloud-based platform Taegis helps detect advanced threats, according to its website.

A SecureWorks spokesperson declined to comment on the sale process, adding that the company was "focused on serving our stakeholders and advancing our mission to secure human progress with Taegis."

Dell and Piper Sandler declined to comment, while Morgan Stanley did not respond to requests for comment.

Dell acquired SecureWorks for $612 million in 2011, before listing its shares through an initial public offering in New York in 2016.

Shares of SecureWorks have lost more than two-thirds of their value from their September 2021 peak, as the company has struggled to compete and differentiate its offerings against larger cybersecurity providers.

Dell has been riding the recent wave of investor enthusiasm for artificial intelligence, its profits boosted by robust demand for its AI-focused servers. The company's shares have risen by about 46% so far this year, outperforming an 18% rise in the S&P 500 index.

SecureWorks is scheduled to report its second-quarter results on Sept. 5. (Reporting by Milana Vinn in New York; Editing by David Gregorio)