Intel Corporation and TPG announced a definitive agreement under which the two parties will establish a newly formed, jointly-owned, independent cybersecurity company.
The new company will be called McAfee following transaction close. TPG will own 51 percent of McAfee and Intel will own 49% in a transaction valuing the business at round about $4.2 billion. TPG is making a $1.1 billion equity investment to help drive growth and enhance focus as a standalone business.
The investment from TPG and continued strategic backing of Intel means that the new entity is expected to capitalise on significant global growth opportunities through greater focus and targeted investment, with the aim to be one of the largest pure-play cybersecurity companies.
Chris Young will be appointed CEO of the new company upon closing of the transaction. He said:
“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.
“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.”
Brian Krzanich, CEO of Intel, said:
“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.
“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.”
Jim Coulter, co-founder and co-CEO of TPG, added:
“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.”
McAfee’s net debt of round about $2bn initially will be financed by Intel until completion of audited financial statements for McAfee. The transaction is expected to close in the second quarter of 2017, subject to certain regulatory approvals and customary closing conditions.