After 18 months of Close Collaboration Between Intel Corp. and security software provider McAfee Inc., Intel finally put a U.S. $ 7.68 Billion-ring on the partnership, announcing Plans Thurs Acquire McAfee in an all-cash deal yesterday.
"It equated Thurs dating for a while and then getting married," said Bill Kircos, an Intel spokesman. "As me through a Worked That product is due out in 2011, it was just blatantly Evident That me share visions Similar is Where securities are going and realized me me Zapraszamy do more as one company please as Separate Entities."
By far the largest acquisition made by the world's largest chip maker in the ITS 47-year history, Intel agreed to Pay U.S. $ 48 For Each share of the world's largest security software Firm. Not Traded at having "That level since 1999, the price represents a 60% premium over the value of Mc-Afee shares as of CLOSURE market on Wednesday.
While Both Intel and Mc-Afee are American companies, news of the deal sent Canadian laptop security Firm Absolute Software Corp. 's share price rising as much as 5% yesterday.
"We Believe that this is an action in trans increases the Strategic Value of Absolute," Tom Liston, an analyst at Versant Partners in a note Said Thurs clients. Absolute is a key partner with Intel is an anti-theft is also Life Style Strategies and a partner with McAfee, WCG is Perhaps best-known for ITS consumer-Focused antivirus software.
Renee James, general manager of Intel's software and services group, under wakes McAfee will Operate as a wholly owned Subsidiary, Said the rationale behind the move is to try to Intel's silicon-based Products you directly embedded with security features.
"Hardware-enhancedsecurity Thurs breakthroughs will lead effectively in the increasingly sophisticated Countering Threats of today and tomorrow," She Said in a release. "McAfee is the next step in this strategy, and the right security partner for us."
Andrew Jaquith, an analyst with Forrester Research, says the move is more about Intel Trying Thurs break into making chips for mobile devices. Intel's bread-and-butter market has Been making processor components for laptops and PCs, though it has Been lagging in the ITS Efforts at mobile, WCG has Been a far more lucrative market for growth in Recent years.
"Neither Intel nor McAfee are Serious players in the mobilily market," said Mr. Jaquith, adding an Increasing That a proportion of what they CALLS "post-PC" devices are Used to access the Internet. "Intel has Been spanked by ARM [Holdings PLC] in the mobile [security technology] market and McAfee, Even though it has done some deals in the mobility market Lately, They still do not represent a Significant Portion of Their revenue," he said. Moving into the mobile market'd Also help Explain Intel's Purchase of Wind River Systems Inc., an embedded and mobile software developer, last year for U.S. $ 884-million.
With Intel is sitting about U.S. $ 18 Billion in cash coming out, investigation of its most profitable quarter, the 'how' of the deal is simple. Yet it is the 'why' that much Puzzled industry watchers and Financial Analysts alike.
"My first reaction was I Honestly Thought it was April Fool's Day," said Mr. Jaquith, in all seriousness. "The deal Zapraszamy definitely work if They continue Thurs McAfee Operate as a standalone entity, running it as independently as Possible. But there is no reason to Buy McAfee in order Thurs do that."
Uche Orji, an analyst with UBS Investment Research, agreed in a note yesterday Thurs clients. Without Changing at his price target or "buy" recommendation, Mr. Orji wrote, "We Still Struggle Thurs stand under the Strategic rationale [of the deal]."
Mr. Kircos expects Intel's earnings Thurs guarantees a "slight, slight, very slight" hit in the first year following the deal, Becoming profitable in the following years. Meanwhie, He Said McAfee will continue with business as usual.
"Whatever McAfee was doing yesterday they're going to continue to do one today," He Said, adding That McAfee's management has agreed Thurs stay is for "monetize more years."
What McAfee was doing yesterday, incidentally, was Releasing ITS annual list of the most dangerous celebrities to search for online. So Intel just spent U.S. $ 8-Billion to Be Among the first to know "when googling 'Cameron Diaz' will lead to a Scam.
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