Intel announced on Wednesday that it has entered into a definitive agreement with TPG to spin out the McAfee security unit as an independent cybersecurity company. The move places a value of $4.2 billion on the newly formed company, of which TPG will own 51 percent — the private investment firm is putting up $1.1 billion.
Leading the new McAfee will be Chris Young, previously Intel’s senior vice president and general manager for its security group. “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,” he said in a letter to company stakeholders highlighting why this move was a good thing.
It’s expected that this deal will close in the second quarter of 2017.
“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,” Intel chief executive Brian Krzanich said in a statement.
Intel acquired McAfee for $7.68 billion in 2010 to beef up its security software and services and differentiate itself from competitors. Then-CEO Paul Otellini hoped that bringing a cybersecurity company on board would enable Intel to better protect millions of products that use its technology, including phones, cars, and home appliances. “This will better protect Internet users and their devices,” Otellini said.
At one point, Intel tried to rebrand McAfee into its Intel Security Group. Those efforts appeared to have failed — hence the spinout. It’s also a result of the company’s refocusing efforts, which involved letting go of 12,000 employees. In April, Intel reported that it will focus on data centers and Internet of Things (IoT) businesses as primary growth engines, with memory and field programmable gate arrays (FPGAs) accelerating these opportunities.
The soon-to-be newly independent McAfee protects more than 250 million endpoints, secures the footprint for nearly two-thirds of the world’s 2,000 largest companies, protects 200 million consumers, and detects 400,000 new threats daily.