Intel has admitted that its $8 billion acquisition of security outfit McAfee never quite worked out and is spinning the business off.
Under the deal Intel will collect $3.1 billion in cash and retain a 49 percent ownership stake of McAfee. Meanwhile TPG will own 51 percent of the new company.
TPG will make a $1.1 billion equity investment in McAfee, which will also take on $2 billion of debt. The deal is expected to close in the second quarter of 2017, Intel said.
Analysts and investors have favoured disposing of the business. It sort of made sense in the days when the PC did well but it did not add much to Intel’s chip sales and now the PC is less important it was better off somewhere else.
It does make money. The unit reported $1.1 billion of revenue in the first half of the year, up 11 per cent from the same period of 2015, and operating income of $182 million, a 391 per cent jump.
Chris Young will be CEO of the new company. He said as 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.
Intel said it still plans to collaborate with McAfee to add security features across its product lines.
Dusting off the McAfee name explains why Intel was not so keen to give the brand back to its colourful founder, John McAfee earlier this week.