Intel Selling Network Security Stonesoft To Raytheon [REPORT]

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Intel acquired the Finnish cyber-security company Stonesoft for $389 million two years back, and now it is planning to sell it to Raytheon-Websense. The announcement of the deal could come today, says a report from Fortune citing knowledgeable sources. The unit manufactures computer firewalls.

Intel streamlining its security portfolio

Intel started building out its security software portfolio when it bought McAfee for $7.7 billion five years back, but the sale of Stonesoft would signify a significant realignment for the chip maker. Intel security is the new name of McAfee unit after rebranding earlier this year. Several observers believe that McAfee will be taken out of networking security if the deal gets done, as it had not been performing well there

Inter Security’s senior vice president and general manager Chris Young recently said that the company will add new products in some areas and divest in others as part of the new strategy. The sell-off will complement Intel’s strategy of moving from the segments that do not match its new strategy around security outcomes for protection, detection and correction.

“We are making some tough trade-offs in our portfolio,” Young said at the company’s Focus 15 event in Las Vegas this week. “We’re also bringing new products [into the portfolio].”

Intel’s plan to sell Stonesoft is in-line with HP’s plan to sell TippingPoint to TrendMicro, Robert Westervelt, Research Director at IDC, told Fortune in an email. “Neither of those networking portfolios were performing well and were losing ground to Palo Alto Networks, Checkpoint, Dell and Fortinet,” Westervelt said.

Raytheon aims to dominate cyber-security

Raytheon is a defense industry giant, and intends to become a cyber-security super power. It bought Websense in April for $1.9 billion. Raytheon-Websense is a joint venture now, -with 80% ownership resting with Raytheon, while the remaining 20% rests with Vista Equity Partners.

Raytheon-Websense CEO John McCormack has outlined the acquisition plans in an internal memo, according to trade publication CRN. The memo states that employee strength at the company will go up by 300 with this move. At the same time, the move will bolster Raytheon’s Triton security platform in the hybrid cloud arena.

Neither Raytheon nor Intel have commented. In pre-market trading Thursday, Intel shares were down 0.78% at $34.71. Year to date, the stock is down almost 6%, while in the last month it is up almost 21%.

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