The tech giant, known for making user-affordable and efficient antivirus software, McAfee has recently revealed to the press that the deal to sell its asset called “enterprise security business” to a company called “Symphony Technology Group” is all done and sealed. The deal will see a gigantic cash outflux of $4bn from Symphony Technology Group to McAfee.
It seems as if STG (abbreviation for Symphony Technology Group) is on to something as it was only last year when they bought a security asset from Dell Technologies called RSA for more than $2bn.
The deal has also come to light almost six months after McAfee’s public announcement on Nasdaq. It is a piece of astonishing news as McAfee had spent years rebranding itself from an ordinary customer-centric antivirus company to a global cybersecurity powerhouse. However, now it seems McAfee is going back to its roots.
The Chief-Executive-Officer of McAfee, Peter Leav, has also shared his words on the deal via a conference call he has had with the investors. He revealed that the deal would expand McAfee’s customer business while also taking care of the company’s enterprise branding and putting forward a more attractive front.
In the financial year 2020, the total revenue of enterprise security business had reached almost $1.3bn. It has also claimed that nearly 86% of the top 100 firms stated by Fortune have employed cybersecurity services somehow.
On the other hand, the total revenue of the company’s vendors’ consumer business has also increased by around 24%, and now it amounts to approximately $1.6bn in total affluence. In the conference call that CEO Peter Leav had attended, he had proudly stated that the company would reach around $19bn by the time 2024 comes upon us.
McAfee’s decision and the deal closely resemble the transactions undertaken by McAfee’s competitors Symantec and Sophos. In August 2019, Broadcom had paid around $10.7bn to buy Symantec’s enterprise security assets and name. Five months later, Broadcom sold a portion of the asset called “Cyber Security Services Unit” to a company called Accenture at an undisclosed amount in the aftermath of the deal.
It was Thoma Bravo’s turn to get involved in a series of deals, and it bought Sophos for about $3.9bn.
Some cyber experts have explained that the reason behind the deal might be the company’s strained relationship with “Enterprise Security.”
Intel was the first one to helm McAfee after the acquisition in the year 2011, which saw tech giants owning McAfee’s rights for $7.7bn. However, Intel’s relationship with McAfee did not turn out to be that sweet and sugar as it soon sold a part of the shares to TPG Capital.
A cyber expert named Zeus Kerravala, a principal analyst at ZK Research has opinionated on the deal and has shared that Peter Leav is a good businessman. Everywhere he has worked, he has done a tremendous job in maximizing the value for shareholders.
He has also added that the deal is positive news for the shareholders as it will increase their value in the company, and it is mainly excellent news for the customers as well as they now will become a part of a much larger organization. Hence, the credibility and value of the services are likely to increase. However, Kerravala is not so sure whether it is good news for McAfee and its consumer business. Though, he hopes it turns out well.
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