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McAfee to Be Taken Private by Advent-Led Group in $14-Billion Deal

In the last few years, McAfee has strengthened its main cybersecurity software business.

McAfee to Be Taken Private by Advent-Led Group in $14-Billion Deal

McAfee was founded by US technology entrepreneur John McAfee in 1987

Highlights
  • McAfee’s deal comes as a pandemic-driven shift to remote working
  • Advent-led group will acquire all outstanding shares of McAfee stock
  • Goldman Sachs and Morgan Stanley are the financial advisers to McAfee

McAfee said on Monday a consortium led by US private equity firm Advent International will take the cyber security company private in a $14 billion (roughly Rs. 1,03,572 crore) deal.

The deal comes as a pandemic-driven shift to remote working and a rise in cyber attacks have spurred demand for antivirus and digital security software.

The company, founded by US technology entrepreneur John McAfee in 1987, was the first to bring to market a commercial antivirus. Intel bought it in 2011, when McAfee himself no longer had any involvement.

In the last few years, McAfee has strengthened its main cybersecurity software business that focuses on retail customers via price increases, new partner programs and good retention rates.

As part of the transaction, the investor group will acquire all outstanding shares of McAfee common stock for $26 (roughly Rs. 1,920) per share in an all-cash deal that values McAfee at about $12 billion (roughly Rs. 88,784 crore) on an equity basis.

The purchase price represents a premium of 22.6 percent over McAfee's closing share price of $21.21 (roughly Rs. 1,570) on November 4, the last trading day before the Wall Street Journal reported about the deal talks.

Shares of the San Jose, California-based company, which made its market debut last year, were down more than 3 percent at $25.36 (roughly Rs. 1,870) in premarket trading, slightly below the offer price.

In a similar deal in August, US cybersecurity company NortonLifeLock had agreed to buy London-listed rival Avast for up to $8.6 billion (roughly Rs. 64,805 crore) to create a leader in consumer security software.

The Advent-led consortium also includes private equity firms Permira Advisers, Crosspoint Capital Partners and Canada Pension Plan Investment Board among others.

Goldman Sachs and Morgan Stanley are the financial advisers to McAfee.

© Thomson Reuters 2021


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Further reading: McAfee, John McAfee, Advent, Cybersecurity
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