The long and winding history of the cybersecurity software company, McAfee, took another interesting turn today when a consortium of investors made up of six investment firms announced that they were buying the company for $ 14 billion.
That purchase amount is based on a share price of $ 26 per share, which the company said represented a 22.6% premium over the share’s closing price last Thursday. It’s worth noting that the stock closed up 20% on Friday, giving it a market capitalization of just over $ 11 billion at the close of markets on Friday.
The consortium is made up of Advent International, Permira Advisers, Crosspoint Capital Partners, Canada Pension Plan Investment Board, GIC Private Limited and a wholly owned subsidiary of the Abu Dhabi Investment Authority. Advent and Permira led today’s acquisition, according to the company.
With McAfee, the investment group gets a consumer security company that has been around in various forms since 1987. The company sold his business arm earlier this year to Symphony Technology Group for $ 4 billion.
Although McAfee has a long history, it still has a growing consumer security business. In its most recent earnings report Also announced today, the company reported net revenue of $ 491 million up 24% year-over-year with 640,000 new subscribers for a total of more than 20 million subscribers, certainly an impressive number, and which had to attract the attention of customers. members of the investment group.
Brian Ruder, Permira’s co-chief technology officer, noted that the acquisition comes at a time when security is a major concern in the consumer market. “The need for personalized, innovative and intuitive online protection services has never been greater,” it said in a statement. He added that his company also liked the brand recognition, partner network, and loyal customer base. He believes his company can leverage his experience working with companies like McAfee to take advantage of these positive traits and further expand the business.
Each of the companies in the investment group will provide financial and operational resources. It is not entirely clear how it will work. The company will undoubtedly have many bosses to deal with. It’s worth noting that McAfee built a “buy” provision into the deal, a fairly common practice that gives you 45 days to find a better price. While that’s an unlikely outcome, the provision provides shareholders with some proof that the company got the best deal it could for them.
As I wrote during the time of Sale of McAfee Enterprise In March, the company has a complicated history, moving between public and private, and at one point it even changed its name:
The company has a complex history, starting life in the 1980s selling firewall software. It was eventually made public before being bought by Intel for $ 7.7 billion in 2010 and go private again. In 2014, the company changed its name to Intel Security before Intel sold a majority stake to TPG in 2017 for $ 4.2 billion and changed the name back to McAfee.
The acquisition has yet to be approved with McAfee shareholders, as well as various regulators, but if it can overcome those hurdles, the deal is expected to close in the first half of next year. The stock was up 0.57% this morning on the news.