martinwolf Transaction Analysis:

*Financial Information

• Transaction Value: $2.075 billion

Transaction Facts

• Dell announced today that it will sell RSA to STG Partners in an all-cash transaction valued at $2.075 billion, subject to certain adjustments. The transaction was first reported late last night in the Wall Street Journal.
• According to their website, RSA serves more than 30,000 customers and has offerings across several areas of cybersecurity. This includes governance, risk and compliance, security incident event management, and threat detection and response, identity and access management and fraud and risk intelligence.
• The transaction is expected to close in the next six to nine months.
• Since news of the deal broke Dell shares have remained relatively unchanged.

martinwolf Analysis

• Worth the Wait: This sale was well worth the wait for Dell. In November it was reported that Dell was investigating the sale of RSA Security for at least $1 billion, including debt. A $2.075 billion purchase price beats that initial rumor four months ago immensely. Dell gained control of RSA in 2016 as part of its $60 billion purchase of EMC. In 2006, EMC bought RSA for $2.1 billion.
• Road to a Channel Leader: RSA catapulted its channel footprint in the last few years and channel partners are a significant part of the company’s success. According to CRN, partners went from accounting for 35 percent of RSA’s business in 2014 to 70 percent of the company’s business in 2018. After significant changes to its channel partners program in February of 2018, the company reported it increased the number of partners at its top two levels by 25 percent from 2018 to 2019.
• What’s Next?: With the sale of RSA, Dell retains two significant security assets — SecureWorks and VMware’s growing security division. It’s not clear how this transaction impacts its plans for SecureWorks. Though the company was reportedly exploring a sale for SecureWorks one year ago, more recent news suggested the company was doubling down by acquiring the remainder.

*Financial information from press release. 

For more information about this transaction, click here to read the press release.

martinwolf was not the advisor in this transaction.

**Meet with martinwolf at RSA Conference: martinwolf will be attending the 2020 RSA Conference in San Francisco February 26-27 and we have a limited number of spots available to meet with RSA partners and members of the broader ecosystem to discuss current valuations and market trends. Please contact Alexa Austin at aaustin@martinwolf.com to reserve a time to meet.