Intel Corp. has reached an agreement with private investment firm TPG to sell a majority stake in its Intel Security unit to TPG, a private investment firm with headquarters in Fort Worth, Texas, and San Francisco.
Under terms of the deal, which is valued at approximately $4.2 billion, Intel will spin-off Intel Security as an independent business to be named McAfee when the transaction closes. TPG will invest $1.1 billion in the newly-formed company and control 51 percent of it. Intel will own the other 49 percent.
Christopher Young, currently Intel Security’s senior vice president and general manager, will be the re-born McAfee’s CEO when that company officially becomes autonomous.
According to a jointly issued press release from Intel and TPG, both companies “will work together to position McAfee as a strong independent company with access to significant financial, operational and technology resources.” Those resources, along with Intel’s continued strategic support, will position McAfee to capitalize on “significant global growth opportunities” in a more targeted way.
In that same press release, Intel CEO Brian Krzanich emphasized that today’s announcement doesn’t signal weakened focus on security.
“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,” Krzanich said. “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.”
TPG is a private equity goliath, with some $70 billion invested in a long list of companies spread across a range of industries. Box, Lenovo, Seagate, and Zscaler are just a few of the many technology companies in which TPG either holds or has held stakes. The firm raised $10.5 billion in fresh investment capital just four months ago.
“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, in the press release.
Today’s news is but the latest development in an ongoing saga that began in 2010, when Intel purchased McAfee for $7.68 billion. The security vendor’s new owners announced their intention to phase out the McAfee brand in favor of Intel Security early in 2014. Last fall, in turn, Intel Security startled channel pros by abruptly announcing that it planned to shut down the popular email security solutions McAfee acquired in 2009 when it purchased MX Logic for $140 million in cash.
In an open letter also published today, Young asserted that cleaving Intel Security from its parent company will benefit the group’s channel partners.
“As a pure-play provider, McAfee will accelerate the rate of innovation in delivering an integrated portfolio that is increasingly automated and orchestrated. And, with the investment by Intel, you will continue to benefit from Intel’s technology leadership,” he wrote. “Rest assured that McAfee will continue to stand behind you, alongside our joint customers, in delivering solutions across the entirety of the threat defense lifecycle.”
According to Intel, the security group it plans to spin off currently safeguards over a quarter of a billion end points. It also increased revenue 11 percent through the first half of 2016 to $1.1 billion, and grew operating income 391 percent to $182 million.
