McAfee has entered into a definitive agreement to sell its enterprise business to a consortium led by Symphony Technology Group (STG) in an all-cash transaction for $4-billion.
The transaction is expected to close by the end of 2021, subject to customary regulatory approvals and closing conditions.
McAfee president and CEO, Peter Leav, comments: “STG is the right partner to continue strengthening our Enterprise business, and this outcome is a testament to the business’ industry-leading solutions and most notably to the outstanding contributions of our employees.
“This transaction will allow McAfee to singularly focus on our consumer business and to accelerate our strategy to be a leader in personal security for consumers.”
“McAfee is one of the most iconic brands in enterprise security and has a reputation for innovation, quality and leadership,” says William Chisholm, managing partner at STG. “We are fully committed to driving the business’ strategy to be the leading device-to-cloud cybersecurity company by partnering with McAfee’s existing world-class team to continue delivering exceptional performance to enterprises and government clients globally.”
In addition to the repayment of approximately $1 billion of existing McAfee indebtedness, McAfee also expects to use a portion of the proceeds from the transaction to pay approximately $175-million in customary transaction expenses and other one-time charges. The $2.75 billion of remaining proceeds will be distributed by Foundation Technology Worldwide, McAfee’s controlled subsidiary, on a pro rata basis to all holders, including McAfee.
McAfee will use its pro rata portion of such proceeds to pay approximately $300-million in required corporate taxes and related payments in connection with the transaction, and will use all remaining proceeds to pay a one-time special dividend of $4.50 per share to holders of our Class A Common Stock. This represents a one-time special dividend rate of approximately 21% of the closing sale price of our Class A Common Stock on Friday, 5 March 2021 prior to McAfee’s entry into the transaction.
McAfee also expects to pay approximately $300-million in additional one-time separation costs and stranded cost optimisation, a portion of which will be expenses paid by proceeds from the transaction.
Until closing, McAfee will continue to conduct and operate the Enterprise business, while McAfee, STG, and the Enterprise business’ leadership team will partner to plan for a successful transition for the business, its employees, and its customers.
At close, McAfee will retain its name and will continue its singular focus on delivering leading solutions to protect consumers and being a leader in personal security for consumers. The Enterprise business will be re-branded, which is expected to occur in the coming months.