Dell Sells RSA Security Business to Private-Equity Firm Symphony for $2.1 Billion

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Symphony Technology Group is leading an investor group to buy
Dell Technologies
’ RSA security business for $2.075 billion.

Ontario Teachers’ Pension Plan Board and AlpInvest Partners are also part of the group. The sale, which is expected to close within six to nine months, includes RSA Archer, RSA NetWitness Platform, RSA SecurID, RSA Fraud and Risk Intelligence, and RSA Conference.

Dell (ticker: DELL) is selling RSA to simplify its business and product portfolio, said Jeff Clarke, COO and vice chairman, in a statement. “It also allows Dell Technologies to focus on our strategy to build automated and intelligent security into infrastructure, platforms and devices to keep data safe, protected and resilient,” he said.

Dell’s stock fell 11 cents, or 0.2%, to $52.77 on Tuesday. The
Nasdaq Composite
ended the day flat.

RSA helps companies with manage areas including detecting and responding to threats, identity and access management, as well as integrated risk management. The business has more than 12,500 customers. The division also runs security conferences, including one that is taking place later this month in San Francisco, according to The Wall Street Journal.

Dell acquired RSA as part of its $60 billion purchase of EMC in 2016. EMC, for its part, bought RSA in 2006 for $2.1 billion, according to press reports. The current sale of RSA kicked off earlier in the first quarter;
Morgan Stanley (MS)
advised on the process. Hogan Lovells provided legal advice to Dell.

RSA wanted a partner that was enthusiastic about its mission, said Rohit Ghai, RSA’s president, in a blog post. “Symphony Technology Group (STG) fully supports our vision, and with a more independent configuration, we expect to be in an even better position to accelerate innovation, ensure customer success with our portfolio of on-prem and cloud solutions, and expand opportunities for our partner ecosystem,” Ghai said.

Data breaches and fraud have become commonplace. Gartner estimated companies globally would spend more than $124 billion on cybersecurity in 2019. As a result, cybersecurity remains a popular area of investment for private equity. Thoma Bravo and Insight Venture Partners are among some of the most active investors.
KKR
(KKR) in April also acquired a minority of KnowBe4, which offers cybersecurity training, according to Fortune.

For Symphony, the deal comes less than a year since the technology-focused private-equity firm acquired Red Seal, which provides cyber risk modeling. It’s unclear what Symphony’s plans are for RSA or how much of the company it owns.

The Palo Alto, Calif. firm invests in software, data and analytics businesses. Earlier this month, STG acquired a majority of CadmiumCD, which provides event-technology software. Symphony in December 2017 was seeking $850 million for its fifth flagship fund, according to a Securities and Exchange Commission filing.

AlpInvest, a unit of the
Carlyle Group,
is a fund-of-funds. It typically invests in PE funds but takes part in secondary transactions and co-investments. A spokeswoman for AlpInvest declined to comment on RSA.

Ontario Teachers, which invests and administers the pensions of 327,000 active and retired teachers, had $201.4 billion in net assets as of June 2019. The pension plan typically invests in venture capital and private- equity funds. It also takes part in co-investments.

UBS Investment Bank and Jefferies advised STG, while John Amorosi, Darren Schweiger, and Arthur M.T. Burke of Davis Polk & Wardwell provided legal advice. UBS and Jefferies provided financing for the RSA deal.

Dell, Symphony and Ontario Teachers didn’t respond to requests for comment.

Write to Luisa Beltran at [email protected]