SANTA CLARA, CA, SAN FRANCISCO & FORT WORTH, TX — Intel Corporation plans to form a new independent cybersecurity company with hedge fund TPG. The new company will be called McAfee following the close of the transaction. TPG will own 51 percent of McAfee and Intel will own 49 percent in a transaction valuing the business at approximately $4.2 billion. TPG is making a $1.1 billion equity investment to help drive growth and enhance focus as a standalone business.
Intel originally acquired McAfee in 2010 for $7.6 billion which was known for making virus protection and firewall software for computers. The company changed the name of the division to Intel Security in 2014 but will now go back to the McAfee name with the spinoff.
TPG, a leading hedge fund with expertise in growing profitable software companies and carve-out investments, will work together with Intel to position McAfee as a strong independent company with access to significant financial, operational and technology resources.
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.
“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,” said Brian Krzanich, CEO of Intel. “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. “TPG is excited to partner with Intel and McAfee management to accelerate growth of the business by enhancing its go-to-market strategy and continuing to grow and strengthen its core product offerings.”
Chris Young, currently Senior Vice President and General Manager of Intel Security, will be appointed CEO of McAfee upon closing of the transaction.
Through the first half of this year, Intel Security Group revenue grew 11 percent to $1.1 billion, while operating income grew 391 percent to $182 million. The division has 7,500 employees.