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Potential Buyers for Intel’s McAfee Security Business

Intel’s security business — the former McAfee — is facing an awkward moment. Intel has met with banks about a possible auction for McAfee, and at least three private equity firms are now conducting preliminary research to potentially buy McAfee, Bloomberg reports. But here’s the thing: Intel apparently hasn’t hired an investment bank to assist with any potential deals, and the chip giant may ultimately keep the security business.

For Intel Security channel partners, these are mixed times. On the one hand, the company has hosted multiple channel partner conferences and shared multiple milestones to energize VARs this year. But on the other hand, some partners still feel burned by Intel’s surprise decision to kill off selected SaaS security services in 2015. Continued reports about Intel potentially selling McAfee can’t be helping the mood across the channel.

According to the latest Bloomberg report:

Intel Corp.’s computer-security unit, McAfee, is drawing interest from private equity firms as the company considers selling the business, people with knowledge of the matter said. Thoma Bravo, Permira and Vista Equity Partners are among firms conducting preliminary research on McAfee in the event of a sale, said the people, who asked not to be identified because the information is private.

List of Potential Intel Security, McAfee Bidders/Buyers

Here’s a closer look at each of those potential bidders, along with their channel know-how.

1. Thoma Bravo is a private equity firm that is reinventing LANDESK, backing SolarWinds and it’s LogicNow acquisition. The company’s investment portfolio also includes Bomgar (secure remote access), DelTek (enterprise project management), DigiCert (enterprise security), Riverbed, SailPoint (identity and and access management). Generally speaking, Thoma Bravo’s portfolio companies have good channel partner relationships.

2. Permira is a global investment firm with stakes in Informatica (big data), Magento (omni-channel marketing) and Metalogix (SharePoint management). Metalogix, in particular, has deep channel expertise but we don’t know if Permira is channel-savvy when it targets IT companies for investment.

3. Vista Equity Partners, another private equity firm, owns Autotask (MSP software), ForcePoint (cybersecurity), Ping (identity and access management), ReturnPath (email security), Navex (compliance software), and Tibco (analytics). Vista previously owned WebSense. That list of investments suggests that Vista would have extensive experience to assist any potential McAfee acquisition…

Intel and McAfee: Mixed Performance

Intel acquired McAfee in 2010 for $7.7 billion, vowing to more tightly integrate security software with hardware — actually “burning” security directly into processors and more. The chip giant has made progress on several security fronts. But overall the McAfee business — and frankly, some of its historic rivals — have been market laggards in recent years.

In 2015, Intel’s software and services division, which has other products outside of security, contributed $2.2 billion of revenue and $210 million of operating profit, Bloomberg said. That gives it an operating margin that’s less than half of Intel overall, Bloomberg added.

McAfee rivals have also struggled to evolve for the mobile and cloud services era. Indeed, chief rival Symantec ultimately sold off its Veritas business in 2015 to refocus on security. Fast forward to present day, and Symantec is buying Blue Coat — though Blue Coat’s executive team will run the combined company, a surefire sign that investors had lost faith in Symantec’s established leadership.

How Security Channel Partner Programs Have Evolved

Meanwhile, several security companies have gotten the jump on next-generation channel partner programs that involve MSPs. Sophos, for instance, launched a comprehensive MSP partner program earlier this year. Webroot has been integrating its platform with several of the major MSP software platform providers for the past few years. Intronis MSP Solutions now promotes security subscription services from parent Barracuda to MSPs. Cisco has successfully promoted OpenDNS to MSPs. And upstarts like Passportal have introduced secure password management tools specifically for MSPs.

Ironically, McAfee had an early start in the MSP-centric partner market, acquiring MX Logic for $140 million back in 2009, but we haven’t heard much about that code base’s progress with MSPs in recent years…

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