SecureWorks (SCWX) IPO Opens Slightly Lower After Weak Pricing

Today's IPO for Dell-spinoff, SecureWorks Corp. (Nasdaq: SCWX), opened for trading at $13.89 after pricing 8,000,000 shares of its Class A common stock at a price to the public of $14.00 per share, below the expected $15.50 - $17.50 range. The size of the offer was also cut from 9,000,000 shares.

BofA Merrill Lynch, Morgan Stanley, Goldman, Sachs & Co. and J.P. Morgan are acting as lead joint bookrunning managers for the offering. Barclays, Citigroup, Credit Suisse, RBC Capital Markets and UBS Investment Bank are acting as bookrunning managers. Pacific Crest Securities, a division of KeyBanc Capital Markets, Stifel, SunTrust Robinson Humphrey and William Blair are acting as co-managers. Academy Securities, Ramirez & Co., Inc., Siebert Brandford Shank & Co., L.L.C. and The Williams Capital Group L.P. are acting as junior co-managers.

SecureWorks is a global provider of intelligence-driven information security solutions exclusively focused on protecting its clients from cyber attacks. SecureWorks’ solutions enable organizations to fortify their cyber defenses to prevent security breaches, detect malicious activity in real time, prioritize and respond rapidly to security breaches and predict emerging threats.

Total revenue was $339.5 million in fiscal 2016, $262.1 million in fiscal 2015 and $205.8 million in fiscal 2014, for annual growth of 30% and 27%, respectively. Subscription revenue was $271.8 million in fiscal 2016, $207.2 million in fiscal 2015 and $170.2 million in fiscal 2014, for annual growth of 31% and 22%, respectively. The company incurred net losses of $72.4 million in fiscal 2016, $38.5 million in fiscal 2015 and $44.5 million in fiscal 2014.

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