Intel Corporation [INTC] and TPG announced an agreement on Wednesday for them to spin off McAfee as a new jointly-owned independent cybersecurity company six years after Intel initially acquired McAfee.
Under the terms of the agreement, TPG will own 51 percent of McAfee while Intel will own 49 percent with the entire business valued at about $.2 billion. TPG is also making a $1.1 billion equity investment in McAfee “to help drive growth and enhance focus as a standalone business” the companies said.
TPG is a global alternative asset firm with over $70 billion of assets under management with many international offices.
Intel first acquired McAfee in 2010 for about $7.7 billion and it has operated as a subsidiary within the Intel Security Group.
“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,” Brian Krzanich, CEO of Intel, said in a statement.
“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,” Jim Coulter, co-founder and co-CEO of TPG, added.
“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,” Bryan Taylor, partner at TPG, said in a statement.
After the transaction is completed, Chris Young will be appointed CEO of McAfee. Young is currently senior vice president and general manager of the Intel Security Group, where he leads the business unit in software and hardware platforms, including McAfee. Previously, Young served as senior vice president at Cisco’s [CSCO] Security Business Group and senior vice president and general manager at VMware.
“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 in an open letter to Intel Security stakeholders.
Intel characterized the new McAfee as one of the world’s largest pure-play cybersecurity companies. TPG and Intel also emphasized that they will work together to support McAfee and help make it a strong independent company with access to significant resources for investment.