Intel Changes The Game With McAfee Buyout (INTC, MFE, SYMC, CHKP)

Intel Corporation (NASDAQ: INTC) has made a game changing event.  It announced that it is acquiring McAfee, Inc. (NYSE: MFE) via a Business Wire press release.  The $7.68 billion deal comes to $48.00 per share, which isn’t too bad considering that McAfee shares traded at $29.93 yesterday.

The release noted that both boards of directors have unanimously approved the deal.  It is subject to McAfee shareholder approval, regulatory clearances and other customary conditions.

Intel noted that today’s security approach does not fully address the billions of new Internet-ready devices connecting, including mobile and wireless devices, TVs, cars, medical devices and ATM machines as well as the accompanying surge in cyber threats.  Intel also noted that it has elevated the priority of security to be on par with its strategic focus areas in energy-efficient performance and Internet connectivity.

McAfee has seen double-digit growth and nearly 80% gross margins last year.  , will become a wholly-owned subsidiary of Intel, reporting into Intel’s Software and Services Group. The group is managed by Renée James, Intel senior vice president, and general manager of the group.

McAfee’s 52-week trading range is $29.53 to $45.68.

This is a game-changing deal considering that a hardware company is getting into the security via a software company.  It will also highlight a few data security players.  Symantec Corporation (NASDAQ: SYMC) is a very troubled company with data security and storage, and its shares are now up 12% at $14.18 in the pre-market trading.  Check Point Software Technologies Ltd. (NASDAQ: CHKP) is also up 5.4% at $36.14 in pre-market trading.

JON C. OGG