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Six years ago, Intel announced its acquisition of McAfee in a deal valued at $7.68 billion. Today, Intel announced that it is spinning out the McAfee business, selling a 51 percent stake of the company to alternative asset firm TPG for $3.1 billion in cash.
Intel rebranded McAfee in January 2014 as Intel Security, though the brand McAfee still persisted across multiple products and with the McAfee Labs research arm. The spin out company will now revert back to the McAfee name.
Chris Young, Intel Security's general manager, is set to lead the new company when the deal closes. Young joined Intel in October 2014, after previously leading Cisco's security group for three years.
The complex details of the deal value the reborn McAfee business at $4.2 billion, with approximately $2.2 billion of equity value and McAfee's net debt of an additional $2 billion. TPG will make a $1.1 billion equity investment in the McAfee business to help drive growth. According to Intel, Intel Security generated $1.1 billion in revenue during the first six months of 2016. Intel Security employs over 7,500 security professionals.
While Intel is divesting a 51 percent share of McAfee, it is still holding onto a 49 percent stake and expects to continue to take an active interest in the business.
"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," Brian Krzanich, CEO of Intel, said in a statement. "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."
In an open letter to Intel Security stakeholders, McAfee's next CEO (and current general manager) Chris Young re-assured people that the move only makes the security vendor stronger.
"Our customers want the reassurance that our strategy has not changed. It hasn’t," Young wrote. "Our partners need to know our commitment will not falter. It won’t. Our employees want to know you are part of a company positioned to thrive.You are."
Sean Michael Kerner is a senior editor at eSecurityPlanet and InternetNews.com. Follow him on Twitter @TechJournalist