Intel reached an agreement with TPG, a private investment fund, to spin out its security division as a newly formed, jointly-owned, independent cybersecurity company.
The new company will be called McAfee, its former name. Chris Young will be appointed CEO of the new company upon closing 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.
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.”
“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.”
Intel Security said its cyber security software protects more than a quarter of a billion 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. 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. Intel Security also increased total bookings 7 percent per year on a constant currency basis from 2013 to 2015.
McAfee offers a suite of software-related security solutions, including end-point and networking products and services that are focused on helping to ensure Internet-connected devices and networks are protected.
Intel said the combination of security software and hardware from one company will ultimately protect devices better from online threats. Intel also said the deal augments its mobile wireless strategy and signals its commitment to focus on security on par with energy-efficient performance and connectivity.
"With the rapid expansion of growth across a vast array of Internet-connected devices, more and more of the elements of our lives have moved online," said Paul Otellini, Intel president and CEO. "In the past, energy-efficient performance and connectivity have defined computing requirements. Looking forward, security will join those as a third pillar of what people demand from all computing experiences.
"The cyber threat landscape has changed dramatically over the past few years, with millions of new threats appearing every month," said Dave DeWalt, president and CEO of McAfee. "We believe this acquisition will result in our ability to deliver a safer, more secure and trusted Internet-enabled device experience."
McAfee, based in Santa Clara and founded in 1987, is the world's largest dedicated security technology company with approximately $2 billion in revenue in 2009. It has approximately 6,100 employees.