Intel is selling off a majority stake in its security software arm – formerly known as McAfee – to private equity firm TPG, which will rename itself to, er, McAfee.
Chipzilla absorbed McAfee Inc in 2010 for $7.68bn, and in 2014 it phased out the McAfee brand name.
According to Intel, that software division is today valued at just $4.2bn including debt. When the transaction completes, the processor giant will get $3.1bn in cash and retain a 49 per cent in the spun-off McAfee, while TPG gets majority control and promises a $1.1bn equity investment for future operations.
"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."
Chris Young, the general manager of Intel Security, will run the new operation and, in a letter to customers, partners, and staff [PDF], said Intel would continue to play a technological role in the reborn McAfee, and the investment from TPG would allow a faster rollout of new products and technologies.
For its part, TPG gets a stake in a growing IT market that could prove very lucrative. Intel Security/McAfee pulled in revenues of $1.1bn in the last quarter, up 11 per cent, and generated an operating income of $182m.
"We have long identified the cybersecurity sector, which has experienced strong growth due to the increasing volume and severity of cyberattacks, as one of the most important areas in technology," said Bryan Taylor, a partner at TPG.
"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."
Rumors of a sale by Intel have been circulating for months and for good reason. The company is looking to refocus on its core business and security software doesn't fit into that model. Some Intel Security execs would, after a few drinks, expound at length about how Intel didn't really "get" the former McAfee team.
Now the software outfit will have some independence and many of those execs will be happy with their new overlords in comparison. However, there may be a fly in the ointment for the new organization if John McAfee – the man who founded and named the company – wrestles his brand back. ®