- Intel and investment firm TPG announced Wednesday they will establish a jointly-owned, independent cybersecurity company called McAfee.
- Chris Young, senior VP and general manager of Intel Security Group, will lead the new company.
- TPG will own 51% of McAfee and Intel will own 49% after receiving $3.1 billion in cash. The transaction valued the business at approximately $4.2 billion.
Reports first emerged in June that Intel was looking to sell its security business. Last week, reports surfaced that TPG was among the top bidders. That report valued the unit at $3 billion, and it was expected to be an outright sale. The decision to create a jointly-owned company came as a surprise to many, especially because it creates one of the world's largest cybersecurity companies.
Jim Coulter, co-founder and co-CEO of TPG, said that spinning off McAfee into its own company will allow for a sharper focus with increased agility. Considering the difficulties other cybersecurity companies have faced in the evolving market, McAfee's independence and name recognition could allow it to flourish.
Intel has been looking to move away from non-core offerings and focus more on emerging areas like IoT and AI. However, Intel Security Group has shown decent momentum this year, so the company may have hesitated to let the division go completely.
Last year, Intel refocused its security business on endpoint and cloud security control, in addition to threat intelligence, analytics and orchestration, according to the company's announcement. The strategy appears to be working. Intel Security Group revenue grew 11% to $1.1 billion in the first half of 2016. Given that the security industry has undergone a bit of a shakeup, Intel may see this as a strategic area to keep its foot in the door.