Nasdaq-listed McAfee is selling off its enterprise security software business to a consortium led by Symphony Technology Group (STG) in an all-cash transaction of $4bn - with the channel that is largely responsible for selling the enterprise services now waiting for any fall-out from the deal.
The consumer business of McAfee is performing far better and is making operating profits but the enterprise unit, which is supported by resellers and managed service providers, is loss-making.
Symantec went down a similar path when it sold off it business division to Broadcom in 2019, and that move led to a channel shake-up across EMEA, with distributors changing and resellers fleeing and being axed, as Broadcom looked to integrate Symantec security into its other acquired businesses.
Will, for instance, STG be looking to sell McAfee as a standalone service to public sector organisations and large enterprises direct, or will it be looking to integrate or package McAfee services with its existing offerings? STG’s current portfolio includes cyber security and risk management solutions provider RSA - acquired from Dell in February 2020 - and cyber risk modelling firm RedSeal, acquired in April 2019.
The channel will also be waiting to hear what is required from STG to sell into the SME market.
The McAfee deal is expected to close by the end of 2021, subject to regulatory approval. McAfee president and chief executive officer Peter Leav said: “STG is the right partner to continue strengthening our enterprise business. 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.”
William Chisholm, managing partner at STG, added: “We are fully committed to driving the business’ strategy to be the leading device-to-cloud cyber security company, by partnering with McAfee’s existing world-class team to continue delivering exceptional performance to enterprises and government clients globally.”
For its part, McAfee expects to reduce debt by around $1bn and pay special dividends to shareholders from the sale.
The enterprise business will be re-branded, which is “expected to occur in the coming months”, said McAfee.
