Cloud computing firm Pivotal Software, which is controlled by Round Rock-based Dell Technologies, said Monday that it expects to raise up to $592 million from its pending initial public offering of stock.
Pivotal Software plans to sell 37 million Class A shares priced between $14 and $16 per share, according to securities filings. It has not yet announced when the IPO will happen.
Dell Technologies holds a majority ownership stake in Pivotal Software.
Analysts say Pivotal Software’s IPO, which the California-based company announced on March 23, could be a way for Dell Technologies to raise capital as it deals with billions in debt, much of which was acquired through its $67 billion purchase of data storage firm EMC Corp. in 2016.
In February, privately owned Dell said it was exploring whether to file for its own IPO or complete a reverse merger with cloud computing subsidiary VMware. The Pivotal Software IPO is considered a less-risky way for Dell to raise money, according to industry analysts.
In addition to its debt load, analysts say Dell could be facing pressure from financial backer Silver Lake Partners to get a greater return on its investment in EMC, and that Dell could be negatively affected by tax law changes that adversely affect highly indebted companies because they place a 30 percent cap on the interest paid on debt.
In March, Dell reported a loss of $511 million for its quarter ending on Feb. 2, although the company also posted a record revenue of $21.9 billion and lowered its loss for continuing operations by roughly 60 percent to $553 million.
CEO Michael Dell has said his company is exploring options “from a position of strength, with a desire to grow Dell Technologies and its businesses even faster and thrive in the very dynamic IT marketplace.”
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