McAfee To Return As Intel Splits Its Security Arm Into Stand-Alone Business

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Intel Security will no longer be inside the chipmaker’s main business

Intel will spin-off its security division into an independent business called McAfee, raising $3.1 billion in the process while retaining a 49 percent stake in the new company.

The chipmaker is working with global investment firm TPG to separate Intel Security and turn it into McAfee, a company which will be worth $4.2 billion once it is established, making it one of the world’s biggest pure-play cyber security firms according to Intel.

TPG will hold a 51 percent controlling stake in McAfee, which will be headed up by current Intel Security general manager Chris Young, when the transaction closes in the second quarter of 2017.

Separating security

Splitting Intel Security from the main company may see like an odd move given it comes a mere five years after Intel acquired McAfee for $7.7 billion and then re-branded it three years later.

McAfeeBut Intel struggled to bring its plan to dole out its cyber security to a wide range of devices by building in hardware level security capabilities into its chips. That strategy evolved into focusing on securing network endpoints and the cloud, as well as working on threat intelligence, analytics and security orchestration.

This pivot effectively separated Intel Security from the focus of the chipmaker’s main businesses, and as such puts it in a position to be divested from the company.

But according to Young, McAfee will not have to go it completely along as it becomes its own entity.

“As a standalone company supported by these two partners, we will be in an even greater position of strength, committed to being the best provider the cyber security industry has ever seen,” Young said.

“We will continue to focus on solving the unique demands of customers in the dynamic cyber security marketplace, drive innovation that anticipates future market needs, and continue to grow through our strategic priorities.”

The separation process has run into a small problem in the form of John McAfee, founder of McAfee, who has filed a lawsuit against Intel about the rights to use his name.

When Intel acquired McAfee, it also gained the rights to McAfee’s trademarks, trade names and associated goodwill. McAfee, the man himself, wished to rename MGT Capital Investments where he serves as the chief executive, to John McAfee Global Technologies Inc.

But Intel blocked McAfee’s requests to do so due to trademark issues, prompting McAfee to file a lawsuit, which accuses Intel of using the McAfee brand to make Intel Security more valuable. In short the situation is almost a farce, but one Intel will need to overcome.

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