Dell’s Pivotal Software Set for $600 Million IPO
Pivotal software, a division of computer giant Dell, is set for an NYSE IPO listing with 37 million Class A shares to be released, priced around $14 – $16, which should raise somewhere around the $600 million mark when public.
Underwritten by Citi, Goldman Sachs and Morgan Stanley, Pivotal which is headquartered in San Francisco with a campus in Palo Alto, will be listed on the New York Stock Exchange under the ticker symbol “PVTL”
Pivotal came about in 2012, borne out of VMware and EMC. Dell, the multinational computer technology giant headquartered in Round Rock, Texas, acquired EMC Corp. the debt-laden data storage provider, for $67 billion in 2016 in what was the highest value takeover ever in the technology sphere.
photo/Revisorweb
Both Ford Motor Co. and Microsoft Corp are major investors in Pivotal, having contributed $253 million in funding. Since 2013, Pivotal has raised approximately $1.7 billion in funding from investors such as Microsoft, GE Ventures and Ford. According to investment tracking firms like Crunchbase and PitchBook, Pivotal has a post-money private valuation reported to be $3.27 billion.
Pivotal was founded in 1989, with its focus on technology consulting services. Data center storage company EMC purchased Pivotal in 2012 and then, along with data center software company VMware, spun out of EMC in 2013.
Following the revamp of Pivotal, the company change its focus, under pressure from outsourced software providers and nearshore software outsourcing, to providing tools for app developers. Pivotal also started selling consulting services for agile development, allowing companies to build software in short and quick iterations.
Dell Technologies took over the Pivotal division when it acquired EMC in what was described as Tech’s Biggest Deal Ever. The deal worth $67 billion, made Dell the world’s No. 1 seller of storage systems, world’s No. 2 seller of servers, and world’s No. 3 seller of PCs.
Similar to other big technology firms going public in recent years, including Dropbox, pivotal is not yet showing a profit, although sales are increasing. Pivotal recorded $509 million in sales for their fiscal 2018 ending 2nd February. The figure represents a healthy 22% increase from the $416 million recorded in the previous year. In 2018, Pivotal recorded a loss of $163.5 million, which is approximately a 30% year-over-year fall from the $232.9 million recorded in the previous year.
So far market reaction has been positive towards the Pivotal IPO which would give Dell 70.1 percent of the total outstanding shares of Piovtal’s common stock. Dell will also control 95.9 percent of the total voting power of common stock.
Author: Jacob Maslow
