Intel to spin off McAfee in $4.2 billion private equity deal
Intel to sell controlling share of its security division to TPG
Intel is selling a majority stake in its security arm to private equity company TPG, valuing the division at $4.2 billion.
Five years after buying McAfee, which became Intel Security, the chipmaker will sell the division off, with TPG buying a 51% controlling share.
The standalone company, which will be jointly owned by Intel and TPG, will once again be named McAfee, and the deal will generate $3.1 billion for Intel.
The private equity group will invest another $1.1 billion to ensure McAfee can stand on its own two feet once more.
Brian Krzanich, CEO of Intel, reassured customers that security will continue to be an important facet of its chips as it pushes into the IoT space.
He added: "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."
TPG co-founder Jim Coulter 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."
TPG decided to buy the stake in Intel Security as cyber attacks increase in volume and as the threat they pose to enterprises increases, with dozens of data breaches regularly reported each year.
"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," said Bryan Taylor, partner at TPG.
In an open letter to Intel Security's stakeholders, CEO Chris Young called employees "our most important strategic asset", and said the division's strategy has not changed in aiming to deliver more automated and orchestrated security tools.
He added: "And, with this move, we will create the ideal company structure to position McAfee for enhanced focus, innovation and growth."
The transaction is expected to close in the second quarter of 2017.