By Samantha Bader, Co-President
Another big shakeup in the technology industry was announced last week, with cybersecurity company McAfee announcing that they were going private again. The company, which has been in and out of the stock market in recent years has been acquired by a consortium of private equity firms in a deal valued at $14 billion.
The group of firms acquiring McAfee, which includes companies Advent International Corp. and Permira Advisers, have come to terms with McAfee on an agreement that will pay $26 a share. The Canadian Pension Plan Investment Board is also included in this group of buyers. In response to the announcement of this deal, the share price of McAfee increased from $21.21 on November 4th to $25.55 on November 8th when the markets opened in New York.
The framework of this deal has two further important components. Firstly, the deal includes the purchase of all of McAfee’s debt, which has been reported at $4 billion. Secondly, McAfee is now free to look for alternative offers for the next 45 days before this deal is set in stone.
The CEO of McAfee, Peter Leav, said, “This transaction is a testament to McAfee’s market-leading online protection solutions, our talented employees, and outstanding customers and partners. We want to thank our employees for their continued hard work and commitment to McAfee. We are thrilled to be partnering with premier firms who truly understand the cybersecurity landscape and have a proven track record of success.”
McAfee was previously bought by Intel in 2010, in a deal that put the value of the company at $7.68 billion. They also sold off their enterprise business last October, which netted them $4 billion in cash proceeds from a consortium led by Symphony Technology Group.
It is a good time to be a powerhouse in the cybersecurity industry. As cyberattacks, including highly publicized ransomware attacks have reached previously unheard of highs, cybersecurity is more crucial than ever. Furthermore, with the emergence of the COVID-19 pandemic, more people are working from home and have seen a need to upgrade their personal cybersecurity as a result.
However, McAfee has not always had the best reputation within the industry, mainly due to the actions of their founder. John McAfee, who left McAfee in 1994, has had a checkered past. In 2012, after being wanted by police in Belize for questioning regarding a murder, he fled to Guatemala. In March of 2021, American authorities charged him with securities fraud, alleging that he was involved in a cryptocurrency scam, wherein he persuaded people to buy coins that he had holdings in, before immediately selling his holdings as prices went up. In June, McAfee was pronounced dead in a jail cell in Barcelona, Spain, just after the Spanish government approved extradition of him to the United States to stand trial. Needless to say, McAfee as a corporation needed some positive news.
It remains to be seen how this deal will affect the competitive landscape of the cybersecurity industry. Furthermore, one wonders how competitors in this space like Norton will respond, or even if McAfee will find an alternative deal instead. As it stands right now, though, McAfee is poised to cash in.