Mergers and Acquisitions

Intel Spins Off McAfee in $4.2B Deal; TPG Involved

Intel Corp. (INTC) has confirmed a deal to spin-off the McAfee security unit as an independent company. TPG Capital is involved.

Under terms of the deal:

  • TPG and Intel (INTC) to jointly invest in spin-out of Intel Security. New business is valued at $4.2 billion.
  • The chip giant will receive $3.1 billion in cash and retain 49 percent stake after completion of the transaction.
  • TPG will own 51 percent of the new company, which will be named McAfee.
  • Intel Security GM Chris Young and existing management team will lead the new company following transaction close. Young published an open letter to all Intel Security stakeholders here.

The chip giant acquired McAfee for $7.6 billion in 2011, so the current deal's terms shows nearly a 50 percent drop in valuation over the past five years.

Rumors about efforts to sell the security business surfaced in June 2016. A shortlist of potential buyers surfaced around July 2016. But TPG emerged as the leading buyout candidate in media reports last week.

Despite the ownership uncertainty, the Intel Security channel team has been working overtime to maintain partner loyalty. Partners have been hoping the deal is finalized -- or at least announced -- before Intel FOCUS, the company’s security event for partners and customers in November.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.