Intel today announced it will spin off its Intel Security business, including its McAfee software. Together with investment firm TPG, it intends to establish a jointly-owned, independent cybersecurity company called McAfee.
TPG would own 51 percent of McAfee, and Intel would own 49 percent. TPG would make a $1.1 billion equity investment in the new standalone company, and it would pay Intel $3.1 billion in cash, valuing Intel Security at about $4.2 billion.
Rumors of an Intel Security sale had been spreading since at least June. Intel had acquired the original McAfee in 2011 for $7.7 billion and was not expected to recoup that amount in a sale.
(The TPG deal might be part of the reason why Intel wants to prevent John McAfee, founder of the original McAfee, from naming another tech company after himself.)
Chris Young would be appointed CEO of the new company upon closing of the transaction, which is expected in the second quarter of 2017. Young is currently senior vice president and general manager of the Intel Security group.
Bryan Taylor, a partner at TPG, said in a prepared statement that the private equity firm had identified the cybersecurity sector as “one of the most important areas in technology,” and the firm saw “a compelling opportunity to invest in a highly-strategic platform that is growing consistently.”
Through the first half of 2016, Intel Security revenue was $1.1 billion, while operating income was $182 million.
Earlier this year, Intel Security published a report, documenting a cybersecurity talent shortage.