The golden days of cybersecurity are possibly making a return with the usual name in tow — McAfee. Renowned chipmaker Intel has today announced that it has completed its proposed transaction with asset management firm TPG, which has led to the formation of the standalone McAfee entity.
With the formation of this jointly-owned cybersecurity company, Intel has transferred a majority of its share in Intel Security to TPG. The chipmaker did make some waves when it acquired McAfee for a monstrous $7.68 billion back in 2010 and launched its own Intel Security division. But, the company wasn’t able to work out miracles over the past six odd years and thus, decided to collaborate with external businesses and relaunch as McAfee.
With regards to the same, McAfee is officially operating as a standalone cybersecurity entity as of today. This company still includes a 49 percent share of chipmaker, but the rest 51 percent majority stake has been sold to TPG. It currently values the business at around $4.2 billion, including equity value of $2.2 billion and net debt of $2 billion (being taken care of by Intel).
TPG has already paid out Intel a massive $3.1 billion in cash and is making an additional $1.1 billion equity investment to provide the company access to significant capital, operational and technology resources. A late addition to the deal is PE firm Thoma Bravo, who acquired an undisclosed minority stake through an agreement with TPG.
Also, the company has gone through a few executive reshufflings, where-in TPG partner Bryan Taylor will now serve as the chairman of McAfee’s board. The task of spearheading the operations of the spin-off entity have been handed over to Christopher Young, who’s now the CEO of McAfee. He has previously been leading Intel Security for about two years. Speaking on the launch of the standalone entity, Young said,
Cybersecurity is the greatest challenge of the connected age, weighing heavily on the minds of parents, executives and world leaders alike. As a standalone company with a clear purpose, McAfee gains the agility to unite people, technology and organisations against our common adversaries and ensure our technology-driven future is safe.
Commenting on the same, Intel CEO Brian Krzanich said,
We offer Chris Young and the McAfee team our full support as they establish themselves as one of the largest pure-play cybersecurity companies in the industry.
The internet/firewall protection products with the McAfee moniker fell under Intel Security and the same was closely associated with the founder — John McAfee — himself. He has even sued the chipmaker for denying him the right to make use of his own last name in future project innovations. And Intel has clapped back stating that they did purchase the rights to the name ‘McAfee’ during the huge acquisition.
Today’s launch of the independent entity with the existing and more popular name, McAfee, would not only enable the company to bank on the brand’s nostalgia but also rub it further into the founder’s face. Yes, they decided to spin-off the company and instead of keeping the Intel Security name, they renamed it back to McAfee. The spin-off is still following the company’s belief that ‘Together is Power.’ which gives it more independence to pursue ‘pure-play’ ambitions without being bogged down by Intel’s chip-focused plans.
Bryan Taylor, Partner at TPG Capital and Chairman of the Board at McAfee also comments:
Since its founding, McAfee has been dedicated to offering its customers industry-leading cybersecurity solutions. Its ongoing commitment to product innovation, a rich partner ecosystem, and superior customer service has created a trusted brand that will thrive as a standalone entity.
The spin-off company currently has more than 7,500 employees, and it holds more than 1,200 security technology patents. Intel was planning to exploit the same for chip-based security offerings, which it thought would be a burgeoning market. But, to their surprise, the demand never materialized and the chipmaker turned its attention to trendy alternatives like the cloud, AR, and AI among others. This move to collaborate with TPG and spin-off Intel Security can definitely be seen as the consolidation of one of the pillars of their businesses.
