and private investment firm TPG
have announced an agreement to jointly establish an independent cybersecurity company called McAfee. TPG will own majority stakes of the company at 51 percent and Intel will take the rest 49 percent. The newly formed cybersecurity firm which is a spin-out of Intel Security (McAfee), is valued at $4.2 billion, where TPG is making a $1.1 billion equity investment to help drive growth and enhance focus as a standalone business.
Both the companies will work together to position McAfee as a strong independent company with access to significant financial, operational and technology resources. With the new investment from TPG and continued strategic backing of Intel, the new entity is expected to capitalize on significant global growth opportunities through greater focus and targeted investment.
Intel claims that the new company will be one of the world’s largest pure-play cybersecurity companies. Last year, Intel Security unveiled a new strategy that refocused the business on endpoint and cloud as security control points, as well as actionable threat intelligence, analytics and orchestration. This new strategy allows customers to detect and respond to more threats faster and with fewer resources.
Brian Krzanich, CEO, Intel said, “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.”
Bryan Taylor, Partner, TPG said, “We have long identified the cybersecurity sector, which has experienced strong growth due to the increasing volume and severity of cyberattacks, as one of the most important areas in technology. Given McAfee’s leading global market position, loyal customer base, and trusted technology, we see a compelling opportunity to invest in a highly-strategic platform that is growing consistently and addressing significant and evolving market demand.”
Christopher Young, the current SVP and GM of Intel Security, will be appointed CEO of McAfee upon closing of the transaction. He said in an open letter
, “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.”
“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.”
Currently, Intel Security platform claims to protect more than 250 million endpoints, secures the footprint for nearly two-thirds of the world’s 2,000 largest companies, detects more than 400,000 new threats each day, and represents more than 7,500 strong of the industry’s most talented professionals.
The terms of the agreement state that TPG will own 51 percent of McAfee in a multi-step transaction valuing Intel Security at approximately $4.2 billion, based on an equity value of approximately $2.2 billion plus McAfee net debt of approximately $2 billion. The debt, initially will be financed by Intel Corporation until completion of audited financial statements for McAfee (expected within three to five months of close). The transaction is expected to close in the second quarter of 2017.