News Highlights:
- Purchase of all of
McAfee’s common stock for $48 per share in cash, valuing the deal at
approximately $7.68 billion. McAfee will operate as a wholly-owned
subsidiary, reporting into Intel’s Software and Services Group. - Acquisition
enables a combination of security software and hardware from one
company to ultimately better protect consumers, corporations and
governments as billions of devices – and the server and cloud networks
that manage them – go online. - Intel elevates focus on
security on par with energy-efficient performance and connectivity. The
acquisition augments Intel’s mobile wireless strategy, helping to better
assure customer and consumer security concerns as these billions of
devices connect. - Intel
has made a number of software-related acquisitions of leaders in their
respective industries that also rely on great silicon, including Wind
River, Havok and now McAfee.
Intel Corporation has entered into a definitive agreement to acquire
McAfee, Inc., through the purchase of all of the company’s common stock
at $48 per share in cash, for approximately $7.68 billion. Both boards
of directors have unanimously approved the deal, which is expected to
close after McAfee shareholder approval, regulatory clearances and other
customary conditions specified in the agreement.
The
acquisition reflects that security is now a fundamental component of
online computing. Today’s security approach does not fully address the
billions of new Internet-ready devices connecting, including mobile and
wireless devices, TVs, cars, medical devices and ATM machines as well as
the accompanying surge in cyber threats. Providing protection to a
diverse online world requires a fundamentally new approach involving
software, hardware and services.
Inside Intel, the company has elevated the
priority of security to be on par with its strategic focus areas in
energy-efficient performance and Internet connectivity.
McAfee,
which has enjoyed double-digit, year-over-year growth and nearly 80
percent gross margins last year, will become a wholly-owned subsidiary
of Intel, reporting into Intel’s Software and Services Group. The group
is managed by Renée James, Intel senior vice president, and general
manager of the group.
“With the rapid expansion of growth across a vast
array of Internet-connected devices, more and more of the elements of
our lives have moved online,” said Paul Otellini, Intel president and
CEO. “In the past, energy-efficient performance and connectivity have
defined computing requirements. Looking forward, security will join
those as a third pillar of what people demand from all computing
experiences.
“The
addition of McAfee products and technologies into the Intel computing
portfolio brings us incredibly talented people with a track record of
delivering security innovations, products and services that the industry
and consumers trust to make connecting to the Internet safer and more
secure,” Otellini added.
“Hardware-enhanced security will lead to
breakthroughs in effectively countering the increasingly sophisticated
threats of today and tomorrow,” said James. “This acquisition is
consistent with our software and services strategy to deliver an
outstanding computing experience in fast-growing business areas,
especially around the move to wireless mobility.”
“McAfee is
the next step in this strategy, and the right security partner for us,”
she added. “Our current work together has impressive prospects, and we
look forward to introducing a product from our strategic partnership
next year.”
“The
cyber threat landscape has changed dramatically over the past few
years, with millions of new threats appearing every month,” said Dave
DeWalt, president and CEO of McAfee. “We believe this acquisition will
result in our ability to deliver a safer, more secure and trusted
Internet-enabled device experience.”
McAfee, based in Santa Clara and
founded in 1987, is the world’s largest dedicated security technology
company with approximately $2 billion in revenue in 2009. With
approximately 6,100 employees, McAfee’s products and technologies
deliver secure solutions and services to consumers, enterprises and
governments around the world and include a strong sales force that works
with a variety of customers.
The company has a suite of software-related
security solutions, including end-point and networking products and
services that are focused on helping to ensure Internet-connected
devices and networks are protected from malicious content, phony
requests and unsecured transactions and communications. Among others,
products include McAfee Total Protection, McAfee Antivirus, McAfee
Internet Security, McAfee Firewall, McAfee IPS as well as an expanding
line of products targeting mobile devices such as smartphones.
Intel has
made a series of recent and successful software acquisitions to pursue a
deliberate strategy focused on leading companies in their industry
delivering software that takes advantage of silicon. These include
gaming, visual computing, embedded device and machine software and now
security.
Home
to two of the most innovative labs and research in the high-tech
industry, Intel and McAfee will also jointly explore future product
concepts to further strengthen security in the cloud network and myriad
of computers and devices people use in their everyday lives.
On a GAAP
basis, Intel expects the combination to be slightly dilutive to earnings
in the first year of operations and approximately flat in the second
year. On a non-GAAP basis, excluding a one-time write down of deferred
revenue when the transaction closes and amortization of acquired
intangibles, Intel expects the combination to be slightly accretive in
the first year and improve beyond that.
Intel was advised by Goldman Sachs
& Co. and Morrison & Foerster LLP. McAfee was advised by Morgan
Stanley & Co. Inc. and Wilson Sonsini Goodrich & Rosati, P.C.
