Intel To Spin Off Its Cyber-Security Unit McAfee
Intel is going to spin out its subsidiary Intel Security, calling the new entity with its old name – McAfee, and selling a majority stake in it to investment firm TPG for USD 3.1 billion in cash. In other words, McAfee, once one of the household names in computer security software, is poised to become an independent business once more.
Intel that bought McAfee for USD 7.7 billion in 2011, will get USD 3.1 billion cash and retain a 49 percent stake in the new company. TPG, based in Fort Worth, Texas, will invest USD 1.1 billion in McAfee and own 51 percent of the company, valuing the entire company at USD 4.2 billion including debt. The transaction is expected to close in the second quarter next year.
The deal ended up as a failed effort by Intel to stake out a major position in the computer security business. At the time of the acquisition, Intel spoke of integrating McAfee security technology into its chips, but little came of those plans, according to a Reuters report.
Brian Krzanich, CEO of Intel said in a statement, “Security remains important in everything we do at Intel and going forward we will continue to integrate industry-leading security and privacy capabilities in our products from the cloud to billions of smart, connected computing devices.”
“As we collaborate with TPG to establish McAfee as an independent company, we will also share in the future success of the business and in the market demand for top-flight security solutions, creating long-term value for McAfee’s customers, partners, employees and Intel’s shareholders. Intel will continue our collaboration with McAfee as we offer safe and secure products to our customers.”
“We believe that McAfee will thrive as an independent company. With TPG’s investment, along with continued support from Intel, McAfee will sharpen its focus and become even more agile in its response to today’s rapidly evolving security sector,” said Jim Coulter, Co-Founder and Co-CEO of TPG.
Chris Young will be appointed CEO of the new company upon closing of the transaction. Today he published an open letter to Intel Security’s stakeholders outlining benefits of the transaction and new company.
“As a standalone company supported by these two partners, we will be in an even greater position of strength, committed to being the best provider the cybersecurity industry has ever seen,” Young said.
“We will continue to focus on solving the unique demands of customers in the dynamic cybersecurity marketplace, drive innovation that anticipates future market needs, and continue to grow through our strategic priorities, he added.