Dell in Talks to Sell RSA Cybersecurity Firm

Dell is said to be finalizing a $2bn deal to sell its RSA cybersecurity company to a private equity firm, according to the Wall Street Journal

Citing sources “familiar with the matter,” the Journal reported Monday that a deal concerning the sale of RSA Security LLC could be finalized as early as today between Dell Technologies Inc. and STG Partners LLC.

Multiple award-winning security company RSA is best known for its software tokens, which generate random codes to enable access to corporate networks. According to its website, the firm has 30,000 customers around the globe. 

RSA Security was founded as an independent company in 1982 and was acquired by EMC Corporation in 2006 for $2.1bn. Dell acquired RSA a decade later with the purchase of EMC.

Reports that Dell was considering divesting the security company were first shared back in November 2019 by Bloomberg. Back then, RSA Security was expected to fetch at least $1bn, including debt.  

A month later, PE Hub reported that Morgan Stanley had been engaged by Dell to complete the sale of RSA in a deal estimated at the time to be worth $3bn.  

News of the possible finalization of the transaction comes one week before RSA's annual conference is due to take place in San Francisco. The conference hit the headlines last week when major sponsor IBM Corporation withdrew its support from the event, citing concerns over the spread of the coronavirus. 

If given the green light, the RSA deal will be the latest in a string of acquisitions of cybersecurity companies by private equity firms. In January, Insight Partners shelled out $5bn to acquire Swiss cloud data management company Veeam Software Inc and set aside a further $1.1bn in an agreement to acquire Armis Inc. 

Then, earlier this month, news broke that PE firm Advent International and Crosspoint Capital Partners would be acquiring Forescout Technologies Inc for $1.9bn

Currently Dell has two different endpoint security products. The computer manufacturer bought a controlling stake in Secureworks in 2011 and through its acquisition of EMC, the company owns 81% of VMware, which last year bought Carbon Black for $2.1bn.

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