With the dramatic fall in the PC market — which was even more dramatic for Intel — the company has been quite busy for a while trying to restructure its business. Its latest effort in trying to keep its head above the surface is linked to its cyber security business formerly known McAfee. The chipmaker is potentially considering selling this branch, now known as Intel Security, reports Financial Times.
If you’re a close follower of tech news, you’ll already know the buzz going on in Silicon Valley linked with cyber security companies. Apparently, private equity buyers are increasingly interested in cyber security companies, anticipating strong cash flow with corporate customers becoming increasingly worried about protecting their business from cyber attacks. Just a couple of weeks ago, Bain Capital sold Blue Coat Security to Symantec for almost double of what it paid the cyber defense company last year.
Intel, reportedly, has been in talks with many such firms and bankers about the future of its cyber security unit. This will be one of the largest deals in the sector, if it goes that way.
This could essentially lead to a group of PE companies joining hands in order to acquire Intel Security for its original price or more.
Intel had bought McAfee in 2010 for $7.7 billion. While the company renamed the security platform as Intel Security, it maintained the ‘McAfee’ brand on many of the products. Intel’s main aim behind buying the security company was to embed its cyber security functionality onto chips, in an effort to detect threats at a deeper level.
It’s been over six years but the company’s goal hasn’t yet been achieved. The sector was led by the likes of David DeWalt, the chief executive who helped engineer the sale, left to lead FireEye, a next generation security company and his replacement, Mike DeCesare, left in 2014 and now runs another security company called ForeScout. Intel Security is currently led by Chris Young, a former Cisco senior vice-president.
Intel’s efforts in trying to keep its business from falling because of the decline in the PC market include laying off 12,000 employees as part of its largest workforce reduction in a decade. According to the company, it is now trying to refocus around selling chips for cloud computing rather than PCs, which still contribute 60 per cent of sales and 40 per cent of profits.