McAfee to sell enterprise business to STG for £2.8 billion

Cyber security giant McAfee has announced it has agreed to sell its enterprise business to a consortium led by Symphony Technology Group (STG) for $4 billion (£2.8 billion).

The transaction is expected to close by the end of 2021, subject to customary regulatory approvals and closing conditions.

Once complete, the enterprise business will be rebranded, while McAfee will move forward focusing solely on delivering personal security for consumers under the existing brand name, the firm said.

"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,” commented Peter Leav, President and CEO of McAfee.

“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, which specialises in device-to-cloud cyber security, has grown its Enterprise business through both organic development, as well as its own acquisitions. In November 2020, the provider released its MVISION XDR offering for improved SOC response, alongside its MVISION Cloud Native Application Protection Platform (CNAPP).

However, its enterprise business has stuttered in recent times, with net revenue for 2020 up just 1.2% to $1.35 billion, while its operating losses grew by 19.2% to $180 million.

By contrast, competitors such as CrowdStrike and SentinelOne have grown rapidly, while tech behemoths such as Microsoft and Cisco Systems also have an ever-increasing presence in the cyber security space.

McAfee will instead focus on its consumer business, which posted $1.56 billion in net revenue for 2020 – a 19.6% increase from its figure of $1.3 billion the year before. Operating income also grew 20.2%, increasing to $333 million from 2019's figure of $277 million.

The deal echoes a similar move by rival Symantec back in 2019, which saw the cyber security firm sell its enterprise division to Broadcom for $10.7 billion, rebranding as NortonLifeLock.

For STG, the takeover follows its $2.08 billion acquisition of encryption firm RSA back in September 2020, as well its RedSeal buyout in April 2019.

"McAfee is one of the most iconic brands in enterprise security and has a reputation for innovation, quality and leadership," said 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."