Private Equity Consortium led by Advent to acquire McAfee

An investor consortium consisting of six investment firms announced that they were acquiring cyber security firm McAfee for $14 billion.

This consortium led by US private equity firm Advent International will take the cyber security company private, according to reports. The consortium consists of Advent International, Permira Advisers, Crosspoint Capital Partners, Canada Pension Plan Investment Board, GIC Private Limited and a wholly owned subsidiary of the Abu Dhabi Investment Authority. Advent and Permira led today’s acquisition, according to the company.

With McAfee, the investment group gets a consumer security company that has existed in various forms since 1987. The company sold its enterprise arm earlier this year to Symphony Technology Group for $4 billion, according to a TechCrunch report.

As part of the transaction, the investor group will acquire all outstanding shares of McAfee common stock for $26 per share in an all-cash deal that values McAfee at about $12 billion on an equity basis. Brian Ruder, co-head of technology at Permira, pointed out that the acquisition comes at a time when security is a big concern in the consumer market.

“The need for personalised, innovative, and intuitive online protection services has never been greater,” he said in a statement. He added that his company also liked the brand recognition, partner network and loyal customer base. He believes his company can leverage its experience working with companies like McAfee to take advantage of these positive traits and scale the company further.

The purchase price represents a premium of 22.6 per cent over McAfee’s closing share price of $21.21 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 per cent at $25.36 in premarket trading, slightly below the offer price. The acquisition still needs a green signal from McAfee shareholders, and various regulators. If it is able to clear those hurdles, the deal is expected to close in the first half of next year.

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

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