Intel said on Wednesday that it will spin out its cyber-security division, which was formerly known as McAfee, and sell a majority stake in it to investment firm TPG for around $3.1 billion in cash. TPG will own around 51% of the new entity, valuing the whole company at $4.2 billion, including debt.

Intel
Intel by Roebot, Flickr

Intel will retain a 49% stake

In 2011, the chip making giant bought McAfee for $7.7 billion, and now, it will retain only a 49% stake in the business. TPG is making a more than $1.1 billion equity investment in the company. Reuters, citing sources familiar with the matter, says the investment firm first approached Intel’s board about a potential transaction for McAfee over a year ago.

In addition, last year, the investment company led a $120 million investment round for security startup Tanium. Also TPG was the lead investor in a $100 million funding round in Zscaler, an internet security firm.

Intel Security general manager Chris Young will be named as CEO of the new company.

“As a standalone company supported by these two partners, we will be in an even greater position of strength, committed to being the best provider the cybersecurity industry has ever seen,” Young said in a statement.

Through the first half of the year, Intel Security’s revenue rose 11% to $1.1 billion, said the chip maker in a statement. According to the statement, the team works with two-thirds of the 2,000 largest companies of the world.

McAfee acquisition didn’t go according to plan

After acquiring McAfee, the chip making giant spoke of integrating McAfee security tech into its chips at the time; however, not much came of those plans. At the time, Intel executives hoped the acquisition would give the chip maker a piece of the emerging business of securing corporations from sophisticated surveillance.

However, newer companies like Mandiant (a unit of FireEye now) came to dominate that business. The growth of the PC slowed at the same time, eroding the potential of traditional McAfee customer base, notes Reuters.

In 2014, the unit was rebranded as Intel Security Group, but after the closing of the deal, which is expected in the second quarter of 2017, the name will revert to the McAfee brand. John McAfee, the founder of McAfee, was on the run for a murder investigation in Belize. Recently, he sued the chip making giant to get back the right to use his name.

On Wednesday, Intel shares closed down 0.30% at $36.46. Year to date, the stock is up more than 4%, while in the last year, it is up almost 28%.