\nMcAfee Corp. (Nasdaq: MCFE), the device-to-cloud cybersecurity company, today announced it has entered into a definitive agreement to sell its Enterprise business to a consortium led by Symphony Technology Group (STG) in an all-cash transaction for $4.0 billion. The transaction is expected to close by the end of 2021, subject to customary regulatory approvals and closing conditions.\n<\/p>\n
\nMcAfee\u2019s Enterprise business has set the pace and standard within the cybersecurity industry for more than 30 years and has become a recognized leader for device-to-cloud cybersecurity solutions. Today, the Enterprise business is a trusted partner for 86% of the Fortune 100 firms around the world and realized $1.3 billion in net revenue in fiscal year 2020.\n<\/p>\n
\nMcAfee President and Chief Executive Officer, Peter Leav, commented \u201cSTG is the right partner to continue strengthening our Enterprise business, and this outcome is a testament to the business\u2019 industry-leading solutions and most notably to the outstanding contributions of our employees.\u201d Leav added, \u201cThis 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.\u201d\n<\/p>\n
\n\u201cMcAfee is one of the most iconic brands in enterprise security and has a reputation for innovation, quality and leadership,\u201d said William Chisholm, Managing Partner at STG. \u201cWe are fully committed to driving the business\u2019 strategy to be the leading device-to-cloud cybersecurity company by partnering with McAfee\u2019s existing world-class team to continue delivering exceptional performance to enterprises and government clients globally.\u201d\n<\/p>\n
\nNews Highlights:\n<\/p>\n
- \n
- \nDivestiture of McAfee Enterprise business for $4.0 billion in cash before tax\n<\/li>\n
- \nMcAfee to become pure play consumer cybersecurity company\n<\/li>\n
- \nMcAfee expects to issue an estimated $4.50 special dividend per Class A common share upon transaction close\n<\/li>\n
- \nMcAfee expects to reduce debt by approximately $1 billion, which is expected to result in a neutral impact to net leverage ratio\n<\/li>\n<\/ul>\n
\nIn addition to the repayment of approximately $1 billion of existing McAfee indebtedness, McAfee also expects to use a portion of the proceeds from the transaction to pay approximately $175 million in customary transaction expenses and other one-time charges. The $2.75 billion of remaining proceeds will be distributed by Foundation Technology Worldwide, McAfee\u2019s controlled subsidiary, on a pro rata basis to all holders, including McAfee Corp. McAfee Corp. will use its pro rata portion of such proceeds to pay approximately $300 million in required corporate taxes and related payments in connection with the transaction, and will use all remaining proceeds to pay a one-time special dividend of $4.50 per share to holders of our Class A Common Stock. This represents a one-time special dividend rate of approximately 21% of the closing sale price of our Class A Common Stock on Friday, March 5, 2021 prior to McAfee\u2019s entry into the transaction.\n<\/p>\n
\nMcAfee also expects to pay approximately $300 million in additional one-time separation costs and stranded cost optimization, a portion of which will be expenses paid by proceeds from the transaction.\n<\/p>\n
\nUntil closing, McAfee will continue to conduct and operate the Enterprise business, while McAfee, STG, and the Enterprise business\u2019 leadership team will partner to plan for a successful transition for the business, its employees, and its customers.\n<\/p>\n
\nAt close, McAfee will retain its name and will continue its singular focus on delivering leading solutions to protect consumers and being a leader in personal security for consumers. The Enterprise business will be re-branded, which is expected to occur in the coming months.\n<\/p>\n
\nGoldman Sachs & Co. LLC and Morgan Stanley & Co. LLC are acting as financial advisors, and Ropes & Gray LLP as legal advisor, to McAfee.\n<\/p>\n
\nUBS Investment Bank, Jefferies LLC and BofA Securities are acting as financial advisors, and Paul Hastings LLP is acting as legal advisor, to STG. UBS Investment Bank, Jefferies Finance LLC and Bank of America are providing financing for the acquisition.\n<\/p>\n
Webcast \/ Conference Call Details<\/b><\/p>\n
\nIn conjunction with this announcement, McAfee will host a webcast conference call today, March 8, 2021, at 8:00 a.m. Eastern Time to discuss the announced transaction. The listen-only webcast is available at https:\/\/ir.mcafee.com\/investors<\/a>. Investors and participants can access the conference call over the phone by dialing (833) 301-1122, or for international callers (631) 658-1012. The conference ID is 6165804.\n<\/p>\n
\nFollowing the conference call, a replay of the webcast, supplemental financial information and earnings slides will be made available on the Investor Relations page of the McAfee\u2019s website at https:\/\/ir.mcafee.com\/news-and-events\/events<\/a>.\n<\/p>\n
About McAfee<\/b><\/p>\n
\nMcAfee is the device-to-cloud cybersecurity company. Inspired by the power of working together, McAfee creates consumer and business solutions that make the world a safer place. www.mcafee.com<\/a><\/p>\n
About STG<\/b><\/p>\n
\nSymphony Technology Group (STG) is the private equity partner to market leading companies in data, software, and analytics. The firm brings expertise, flexibility, and resources to build strategic value and unlock the potential of innovative companies. Partnering to build customer-centric, market winning portfolio companies, STG creates sustainable foundations for growth that bring value to all existing and future stakeholders. The firm is dedicated to transforming and building outstanding technology companies in partnership with world class management teams. STG\u2019s expansive portfolio has consisted of more than 35 global companies. For more information, please visit www.stgpartners.com<\/a>.\n<\/p>\n
Forward-Looking Statements<\/b><\/p>\n
\nIn addition to historical consolidated financial information, certain statements in this press release and on the related teleconference call may contain \u201cforward-looking statements\u201d within the meaning U.S. federal securities laws that involve substantial risks and uncertainties. All statements other than statements of historical fact included in this press release and on the related teleconference call are forward-looking statements. These statements may include words such as \u201canticipate,\u201d \u201cestimate,\u201d \u201cexpect,\u201d \u201cproject,\u201d \u201cplan,\u201d \u201cintend,\u201d \u201cbelieve,\u201d \u201cmay,\u201d \u201cwill,\u201d \u201cshould,\u201d \u201ccan have,\u201d \u201clikely\u201d and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements McAfee makes relating to the estimated timing of the closing of the transaction or the expected use of proceeds therefrom; the impact of the transaction on McAfee\u2019s Consumer business; the integration of its Enterprise business with STG Group and its existing assets; and McAfee\u2019s plans and objectives for future operations, growth initiatives, or strategies are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that McAfee expected. Specific factors that could cause such a difference include, but are not limited to: delays in obtaining required regulatory approvals or the satisfaction of other closing conditions; the effectiveness and efficiency of any separation activities as a result of the transaction; the timing of the declaration of a special dividend, which is based on a number of assumptions regarding the realizable net cash proceeds from the transaction and other cash flow items; the impact of the COVID-19 pandemic; McAfee\u2019s ability to adapt to rapid technological change, evolving industry standards and changing customer needs, requirements or preferences; the impact on McAfee\u2019s business of a network or data security incident or unauthorized access to its network or data or its customers\u2019 data; the effects on McAfee\u2019s business if we are unable to acquire new customers, if its customers do not renew their arrangements with us, or if McAfee is unable to expand sales to its existing customers or develop new solutions or solution packages that achieve market acceptance; McAfee\u2019s ability to manage its growth effectively, execute its business plan, maintain high levels of service and customer satisfaction or adequately address competitive challenges; McAfee\u2019s dependence on its senior management team and other key employees; McAfee\u2019s ability to enhance and expand its sales and marketing capabilities; McAfee\u2019s ability to attract and retain highly qualified personnel to execute its growth plan; the risks associated with interruptions or performance problems of its technology, infrastructure and service providers; McAfee\u2019s dependence on Amazon Web Services cloud infrastructure services; the impact of data privacy concerns, evolving regulations of cloud computing, cross-border data transfer restrictions and other domestic and foreign laws and regulations; the impact of volatility in quarterly operating results; the risks associated with McAfee\u2019s revenue recognition policy and other factors may distort its financial results in any given period; the effects on McAfee\u2019s customer base and business if we are unable to enhance its brand cost-effectively; McAfee\u2019s ability to comply with anti-corruption, anti-bribery and similar laws; McAfee\u2019s ability to comply with governmental export and import controls and economic sanctions laws; the potential adverse impact of legal proceedings; McAfee\u2019s ability to identify suitable acquisition targets or otherwise successfully implement its growth strategy; the impact of a change in McAfee\u2019s pricing model; McAfee\u2019s ability to meet service level commitments under its customer contracts; the impact on McAfee\u2019s business and reputation if it is unable to provide high-quality customer support; McAfee\u2019s dependence on strategic relationships with third parties; the impact of adverse general and industry-specific economic and market conditions and reductions in IT and identity spending; McAfee\u2019s dependence on adequate research and development resources and its ability to successfully complete acquisitions; McAfee\u2019s reliance on software and services from other parties; the impact of real or perceived errors, failures, vulnerabilities or bugs in McAfee\u2019s solutions; McAfee\u2019s ability to protect its proprietary rights; the impact on McAfee\u2019s business if we are subject to infringement claim or a claim that results in a significant damage award; the risks associated with McAfee\u2019s use of open source software in its solutions, solution packages and subscriptions; McAfee\u2019s reliance on SaaS vendors to operate certain functions of its business; the risks associated with indemnity provisions in McAfee\u2019s agreements; the risks associated with liability claims if McAfee\u2019s breach its contracts; the impact of the failure by McAfee\u2019s customers to pay it in accordance with the terms of their agreements; the risks associated with exposure to foreign currency fluctuations; the impact of potentially adverse tax consequences associated with McAfee\u2019s international operations; the impact of changes in tax laws or regulations; the impact of the Tax Act; McAfee\u2019s ability to maintain its corporate culture; McAfee\u2019s ability to develop and maintain proper and effective internal control over financial reporting; the risks associated with having operations and employees located in Israel; and the impact of catastrophic events on McAfee\u2019s business. Given these factors, as well as other variables that may affect McAfee\u2019s operating results, you should not rely on forward-looking statements, assume that past financial performance will be a reliable indicator of future performance, or use historical trends to anticipate results or trends in future periods. The forward-looking statements included in this press release and on the related teleconference call relate only to events as of the date hereof. McAfee undertakes no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.\n<\/p>\n
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View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20210308005291\/en\/<\/a><\/span><\/p>\n
McAfee Investor Contact:
\n<\/b>
Eduardo Fleites
\n
investor@mcafee.com<\/a><\/p>\nMcAfee Media Contact:
\n<\/b>
Jaime Le
\n
media@mcafee.com<\/a><\/p>\nSTG Media Contact:
\n<\/b>
Gloria Consola
\n
pr@stgpartners.com <\/a><\/p>\nKEYWORDS:<\/b> California United States North America<\/p>\n
INDUSTRY KEYWORDS:<\/b> Internet Security Data Management Technology Software<\/p>\n
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