Intel Corporation May Sell Security Business [REPORT]

Intel Corporation May Sell Security Business [REPORT]
By The original uploader was VD64992 at English Wikipedia [Public domain], via Wikimedia Commons

Intel could be planning to sell its Security arm, claims the Financial Times. The chip maker has reportedly been in talks with several banks to find a buyer for its cyber-security division. Intel’s Security division was created after it acquired antivirus software maker McAfee in 2010. In 2014, the chip maker company rebranded its McAfee business as Intel Security.

Intel failed to achieve its plan

The FT believes a few private-equity firms could come together to acquire Intel’s security arm, and the chip maker could get more than what it paid ($7.7 billion) for McAfee six years ago.

In 2010, Intel bought McAfee to put its cyber-security functionality onto chips with the intention of detecting threats at a deeper level, but it appears the chip maker failed to achieve this. David DeWalt, the executive who led the sale, left to lead FireEye. His replacement, Mike DeCesare, resigned in 2014 to start his own security company, ForeScout. Presently, Intel’s Security Arm is being run by Chris Young, a former Cisco VP.

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“I could see them selling a piece of the service, but not all security capabilities,” Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, told the Financial Times. “Intel has a decent security play right now and security is paramount to the future of IoT. Hardware-based security is vital to the future of computing.”

Rising interest of private-equity in security firms

Lately, private-equity buyers have been interested in cyber-security companies, which are expected to make lots of revenue as corporate customers are ready to spend millions to keep their business protected from cyber-threats. Earlier this month in a similar deal, private-equity firm Bain Capital sold Blue Coat Security to Symantec for $4.65 billion. Also authentication service Ping Identity was recently bought by Vista Equity Partners. Ping Identity was planning an IPO in June.

After being hit by the drop in the PC market, the chip maker has been transitioning away from PCs. A few months ago, it revealed plans to slash 12,000 jobs – its biggest workforce reduction in a decade. The company is now focusing on making chips for the Internet of Things and data centers, even though PCs still account for 60% of its sales and 40% of its profits.

On Friday, Intel shares closed down 4.36% at $31.55. Year to date, the stock is down almost 10%, while in the last year, it is up almost 2%. the stock has a 52-week high of $35.59 and a 52-week low of $24.87.

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