Dell picks Morgan Stanley to sell RSA Security

Dell's sale of RSA Security is expected to fetch at least $3 billion, sources told PE Hub

Dell Technologies has hired Morgan Stanley to sell its cybersecurity business RSA Security, three sources familiar with the process told PE Hub.

The process is expected to kickoff in the first quarter, the people said.

RSA Security, based in Bedford, Massachusetts, helps companies  detect and respond to advanced cybersecurity attacks, manage user access control and reduce business risk, fraud and cybercrime.

RSA has more than 30,000 customers worldwide, including brands ADP, Toshiba, Amore Pacific, RC Willey and others. The company has offices in 41 countries with more than 3000 employees worldwide.

RSA produced between $170 million and $200 million in annual Ebitda, one of the sources said. The company is expected to fetch at least $3 billion in its sale, the people said.

Bloomberg News, which first broke the news on Dell Technologies exploring options for RSA Security, projected a deal valuation of at least $1 billion.

RSA became a part of Dell through the $67 billion merger between Dell and  cloud computing and data storage company EMC Corporation, in 2016. The combined company is known as Dell EMC.

In 2006, EMC acquired RSA for $2.1 billion, according to the company’s announcement at that time.

Dell Technologies, a personal-computer maker and data-storage company,  entered the public markets again in December 2018. Silver Lake, which took the company public in 2013, still remains an investor in the company and owns roughly 137 million shares of the Dell’s stock. Michael Dell, the company’s founder and CEO, owns a control stake.

Dell’s stock traded at $50.85 per share Monday afternoon, Dec. 23, up nearly 2.5 percent since the market close on Friday, Dec. 20.

Morgan Stanley declined to comment. RSA, Dell and Silver Lake did not return PE Hub’s requests for comment before the press time.

Action Item: Check out RSA Security’s latest report here.