McAfee shareholders to receive $26.00 per share
in cash
- The transaction is valued at over $14 billion
- The purchase price represents a premium of approximately 22.6%
over McAfee’s closing share price of $21.21 on November 4,
2021
- Investor Group comprised of Advent, Permira, Crosspoint
Capital, CPP Investments, GIC and ADIA
McAfee Corp. (NASDAQ:MCFE, “McAfee”), a global leader in online
protection, today announced it has entered into a definitive
agreement to be acquired by an investor group led by Advent
International Corporation (“Advent”) and Permira Advisers LLC
(“Permira”), Crosspoint Capital Partners (“Crosspoint Capital”),
Canada Pension Plan Investment Board (“CPP Investments”), GIC
Private Limited (“GIC”), and a wholly owned subsidiary of the Abu
Dhabi Investment Authority (“ADIA”) (collectively, “the Investor
Group”).
As part of the transaction, the Investor Group will acquire all
outstanding shares of McAfee common stock for $26.00 per share in
an all-cash transaction valued at approximately $12 billion on an
equity value basis, and over $14 billion on an enterprise value
basis after giving effect to repayment of McAfee debt. The purchase
price represents a premium of approximately 22.6% over McAfee’s
closing share price of $21.21 on November 4, 2021, the last trading
day prior to media reports regarding a potential sale of
McAfee.
Upon completion of the transaction, the Investor Group will take
ownership of McAfee. As a privately held company, McAfee will
continue building on its success and proven track record of growth
as a pure-play consumer cybersecurity leader following the sale of
McAfee’s Enterprise business, and the associated one-time dividend
of $4.50 per share, to private equity firm Symphony Technology
Group for $4.0 billion, which closed on July 27, 2021.
“This transaction is a testament to McAfee’s market-leading
online protection solutions, our talented employees, and
outstanding customers and partners,” said McAfee President and
Chief Executive Officer, Peter Leav. “We want to thank our
employees for their continued hard work and commitment to McAfee.
We are thrilled to be partnering with premier firms who truly
understand the cybersecurity landscape and have a proven track
record of success.”
In 2017, TPG partnered with Intel to carve out McAfee from
Intel’s core operations to establish a pure-play cybersecurity
company with access to significant capital, operational and
technology resources. McAfee completed its initial public offering
last year, with TPG and Intel remaining as shareholders in the
company.
Jon Winkelried, Chief Executive Officer of TPG and Chair of the
McAfee Board, commented: “Today’s announcement signals continued
growth and opportunity for McAfee. Over the last four years, the
company has expanded its product portfolio, enhanced its
go-to-market strategy, and pursued strategic M&A, including the
divestiture of its enterprise business. We’re proud that today
McAfee is a leading consumer cybersecurity franchise, protecting
the digital lives of 20 million subscribers across the globe.”
Tim Millikin, Partner at TPG and McAfee Board member, added:
“It’s been a privilege to have partnered with McAfee and its
leadership team to help navigate the company’s transformation and
growth over the last four years. Our partnership with McAfee
reflects TPG’s focus on investing in growth to build companies that
are driving differentiated value in their markets.”
“McAfee is one of the most trusted brands in the essential
business of consumer digital protection,” said Bryan Taylor, Head
of Advent’s Technology Investment Team and a Managing Partner in
Palo Alto. “As consumers face new and complex cyber risks, we see
tremendous opportunity to build on McAfee’s differentiated
technology platform to continue delivering innovative solutions
that can protect all facets of the digital lives of people around
the world. We look forward to working alongside our investment
partners and the talented McAfee team to continue setting the bar
for consumer digital protection.”
Brian Ruder, Co-Head of Technology at Permira, commented: “The
need for personalized, innovative, and intuitive online protection
services has never been greater. McAfee boasts an enviable brand,
extensive partner ecosystem, loyal customer base and a rigorous
commitment to product development. With our extensive experience in
scaling global consumer technology and cybersecurity businesses, we
are excited to work closely with McAfee and our fellow investors to
help position the company for even greater heights.”
Greg Clark, Managing Partner at Crosspoint Capital and former
Chief Executive Officer of Symantec added: “The risks that
consumers face from all aspects of their digital lives is immense,
and these risks are unprecedented and rapidly increasing. Consumers
buy from brands they trust, and with the globally recognized brand
of McAfee, we see the long term opportunity to deliver products and
services to address these risks in all aspects of their digital
presence.”
Collectively, the Investor Group will provide McAfee with both
financial and operational resources to further enhance its consumer
offering and capture the rapid growth in consumer demand for
digital protection services. McAfee’s strong brand awareness,
diversified distribution model and customer-centric approach has
made it a clear leader in the rapidly evolving consumer online
protection space. The Investor Group will support McAfee as it
continues to broaden its differentiated online protection solutions
and drive long-term value through market expansion.
Transaction Details
Under the terms of the agreement, which has been approved by the
McAfee Board of Directors, McAfee shareholders will receive $26.00
in cash for each share of common stock they own.
The transaction is expected to close in the first half of 2022,
subject to customary closing conditions, including, among others,
approval by McAfee shareholders, receipt of regulatory approvals,
and clearance by the Committee on Foreign Investment in the United
States. Intel Americas, Inc. and certain funds affiliated with TPG
Global, LLC have entered into a voting agreement pursuant to which
they have agreed, among other things, to vote their shares of
company stock in favor of the transaction, subject to certain
conditions. The voting support under the voting agreement ceases
automatically if the merger agreement is terminated or if the
McAfee board makes an adverse recommendation change. These
stockholders currently represent approximately 67.9% of the current
outstanding voting power of the McAfee common stock.
Consistent with the McAfee Board’s commitment to maximizing
stockholder value, under the terms of the definitive merger
agreement, McAfee’s Board and advisors may actively initiate,
solicit and consider alternative acquisition proposals during a
45-day “go shop” period. McAfee has the right to terminate the
merger agreement to accept a superior proposal during the go-shop
period, subject to the terms and conditions of the merger
agreement. There can be no assurances that this process will result
in a superior proposal, and McAfee does not intend to disclose
developments with respect to this solicitation process unless and
until McAfee’s Board makes a determination requiring further
disclosure.
The buyer entity in the merger, Condor BidCo, Inc. (“Parent”),
has obtained equity financing and debt financing commitments for
the purpose of financing the transactions contemplated by the
merger agreement. Funds advised by the Investor Group have
committed to capitalize Parent at the closing of the merger with an
aggregate equity contribution equal to $5.2 billion on the terms
and subject to the conditions set forth in signed equity commitment
letters.
The Investor Group has obtained a commitment from JPMorgan Chase
Bank, N.A., Bank of America, N.A., Credit Suisse AG, Cayman Islands
Branch, Barclays Bank PLC, Citibank, N.A. (and/or its affiliates),
HSBC Bank USA, National Association, Royal Bank of Canada, CPPIB
Credit Investments III Inc., UBS AG, Stamford Branch and PSP
Investments Credit II USA LLC to provide debt financing consisting
of a $6.66 billion first lien term loan facility, a $1 billion
first lien cash flow revolving facility and a $2.32 billion senior
unsecured bridge facility (which may be replaced with senior notes
issued through a Rule 144A or other private placement), subject, in
each case, to customary conditions. PSP Investments Credit USA LLC
and investment funds managed by Neuberger Berman have agreed to
provide the Investor Group with preferred equity financing with an
aggregate liquidation preference of up to $800 million, subject to
customary conditions.
Upon completion of the transaction, McAfee common stock will no
longer be listed on any public securities exchange.
Third Quarter Earnings Conference Call Update
Separately, McAfee will announce today its third quarter
financial results, which will be available on the “Investor
Relations” section of the McAfee website. In light of the announced
transaction with the Investor Group, McAfee has cancelled the
earnings call previously scheduled for Tuesday, November 9,
2021.
Advisors
Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC are
serving as financial advisors to McAfee and Ropes & Gray and
Moulton Moore Stella are serving as legal counsel. JP Morgan
Securities LLC, BofA Securities, Inc., Barclays Capital Inc. and
Citigroup Global Markets Inc. are serving as financial advisors,
with Bryant Stibel Group serving as strategic operating advisors to
the Investor Group. Fried, Frank, Harris, Shriver & Jacobson
are acting as M&A legal counsel and Kirkland & Ellis are
acting as Finance legal counsel to the Investor Group.
The debt financing for the transaction is being provided by
JPMorgan Chase Bank, N.A., Bank of America, N.A., BofA Securities,
Inc., Credit Suisse AG, Cayman Islands Branch, Credit Suisse Loan
Funding LLC, Barclays Bank PLC, Citigroup Global Markets Inc., HSBC
Securities (USA) Inc., HSBC Bank USA, National Association, Royal
Bank of Canada, RBC Capital Markets LLC, CPPIB Credit Investments
III Inc., UBS AG, Stamford Branch, UBS Securities LLC and PSP
Investments Credit II USA LLC, and the preferred equity financing
is being arranged and provided by PSP Investments Credit USA LLC
and investment funds managed by Neuberger Berman.
About McAfee
McAfee Corp. (Nasdaq: MCFE) is a global leader in online
protection for consumers. Focused on protecting people, not just
devices, McAfee consumer solutions adapt to users’ needs in an
always online world, empowering them to live securely through
integrated, intuitive solutions that protect their families and
communities with the right security at the right moment. For more
information, please visit https://www.mcafee.com/consumer.
About Advent International
Founded in 1984, Advent International is one of the largest and
most experienced global private equity investors. The firm has
invested in over 380 private equity investments across 42
countries, and as of June 30, 2021, had $81 billion in assets under
management. With 15 offices in 12 countries, Advent has established
a globally integrated team of over 245 private equity investment
professionals across North America, Europe, Latin America and Asia.
The firm focuses on investments in five core sectors, including
business and financial services; health care; industrial; retail,
consumer and leisure; and technology. After 35 years dedicated to
international investing, Advent remains committed to partnering
with management teams to deliver sustained revenue and earnings
growth for its portfolio companies. For more information, visit:
www.adventinternational.com or
www.linkedin.com/company/advent-international.
About Permira
Permira backs growth at scale. Founded in 1985, the firm advises
funds with total committed capital of approximately US$50bn (€44bn)
and makes long-term majority and minority growth investments. The
Permira funds have an extensive track record in tech and
tech-enabled investing, with a particular focus on digital consumer
and enterprise cloud end markets . Permira employs over 350 people
in 15 offices across Europe, North America, and Asia. The Permira
funds have previously backed and helped scale some of the largest
and fastest growing software, e-commerce and consumer technology
businesses globally, including Exclusive Group, Ancestry.com,
LegalZoom, Adevinta, Klarna, Genesys, Informatica and many others.
For more information, visit www.permira.com.
About Crosspoint Capital Partners
Crosspoint Capital Partners is a private equity investment firm
focused on the cybersecurity, privacy and infrastructure software
markets. Crosspoint has assembled a group of highly successful
operators, investors and sector experts to partner with
foundational technology companies and drive differentiated returns.
Crosspoint has offices in Menlo Park, CA and Boston, MA. For more
information visit: www.crosspointcapital.com.
About CPP Investments
Canada Pension Plan Investment Board (CPP Investments™) is a
professional investment management organization that manages the
Fund in the best interest of the more than 20 million contributors
and beneficiaries of the Canada Pension Plan. In order to build
diversified portfolios of assets, investments are made around the
world in public equities, private equities, real estate,
infrastructure and fixed income. Headquartered in Toronto, with
offices in Hong Kong, London, Luxembourg, Mumbai, New York City,
San Francisco, São Paulo and Sydney, CPP Investments is governed
and managed independently of the Canada Pension Plan and at arm’s
length from governments. On June 30, 2021, the Fund totaled C$519.6
billion. For more information, please visit www.cppinvestments.com or follow us on LinkedIn,
Facebook or Twitter.
About TPG
TPG is a leading global alternative asset firm founded in San
Francisco in 1992 with $108 billion of assets under management and
investment and operational teams in 12 offices globally. TPG
invests across five multi-product platforms: Capital, Growth,
Impact, Real Estate, and Market Solutions. TPG aims to build
dynamic products and options for its clients while also instituting
discipline and operational excellence across the investment
strategy and performance of its portfolio. For more information,
visit www.tpg.com or @TPG on Twitter.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains “forward-looking statements.” Such
forward-looking statements include statements relating to McAfee’s
strategy, goals, future focus areas, and the value of, timing and
prospects of the proposed merger (the “Merger”). These
forward-looking statements are based on McAfee management’s beliefs
and assumptions and on information currently available to
management. Forward-looking statements include all statements that
are not historical facts and may be identified by terms such as
“expects,” “believes,” “plans,” or similar expressions and the
negatives of those terms. These forward-looking statements involve
known and unknown risks, uncertainties, and other factors that may
cause actual results, performance or achievements to be materially
different from any future results, performance or achievements,
expressed or implied by the forward-looking statements, including:
(a) risks related to the satisfaction of the conditions to Closing
(including the failure to obtain necessary regulatory approvals and
the requisite approval of the stockholders) in the anticipated
timeframe or at all; (b) the occurrence of any event, change or
other circumstances that could give rise to the termination of the
merger agreement; (c) risks related to disruption of management’s
attention from McAfee’s ongoing business operations due to the
Merger; (d) disruption from the Merger making it difficult to
maintain business and operational relationships, including
retaining and hiring key personnel and maintaining relationships
with McAfee’s customers, vendors and others with whom it does
business; (e) significant transaction costs; (f) the risk of
litigation and/or regulatory actions related to the Merger; (g) the
possibility that general economic conditions and conditions and
uncertainty caused by the COVID-19 pandemic, could cause
information technology spending to be reduced or purchasing
decisions to be delayed; (h) an increase in insurance claims; (i)
an increase in customer cancellations; (j) the inability to
increase sales to existing customers and to attract new customers;
(k) McAfee’s failure to integrate recent or future acquired
businesses successfully or to achieve expected synergies; (l) the
timing and success of new product introductions by McAfee or its
competitors; (m) changes in McAfee’s pricing policies or those of
its competitors; (n) developments with respect to legal or
regulatory proceedings; (o) the inability to achieve revenue growth
or to enable margin expansion; (p) changes in McAfee’s estimates
with respect to its long-term corporate tax rate; and (q) such
other risks and uncertainties described more fully in documents
filed with or furnished to the SEC by McAfee, including under the
heading “Risk Factors” in McAfee’s Annual Report on Form 10-K
previously filed with the SEC on March 1, 2021 and under Item 1A
“Risk Factors” in its Quarterly Report on Form 10-Q previously
filed with the SEC on August 10, 2021. All information provided in
this Current Report on Form 8-K is as of the date hereof and McAfee
undertakes no duty to update this information except as required by
law.
Additional Information and Where to Find It
In connection with the Merger, McAfee will file with the SEC a
preliminary Proxy Statement of McAfee (the “Proxy Statement”).
McAfee plans to mail to its stockholders a definitive Proxy
Statement in connection with the Merger. McAfee URGES YOU TO READ
THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS FILED OR TO BE
FILED WITH THE SEC CAREFULLY AS THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT MCAFEE, THE INVESTOR
GROUP, THE MERGER AND RELATED MATTERS. You will be able to obtain a
free copy of the Proxy Statement and other related documents (when
available) filed by McAfee with the SEC at the website maintained
by the SEC at www.sec.gov. You also will be able to obtain a free
copy of the Proxy Statement and other documents (when available)
filed by McAfee with the SEC by accessing the Investor Relations
section of McAfee’s website at https://ir.mcafee.com/.
Participants in the Solicitation
McAfee and certain of its directors, executive officers and
employees may be considered to be participants in the solicitation
of proxies from McAfee’s stockholders in connection with the
Merger. Information regarding the persons who may, under the rules
of the SEC, be deemed participants in the solicitation of the
stockholders of McAfee in connection with the Merger, including a
description of their respective direct or indirect interests, by
security holdings or otherwise will be included in the Proxy
Statement when it is filed with the SEC. You may also find
additional information about McAfee’s directors and executive
officers in McAfee’s proxy statement for its 2021 Annual Meeting of
Stockholders, which was filed with the SEC on April 22, 2021 and in
subsequently filed Current Reports on Form 8-K and Quarterly
Reports on Form 10-Q. These documents (when available) may be
obtained free of charge from the SEC’s website at www.sec.gov and
McAfee’s website at www.mcafee.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211108005616/en/
McAfee Investors: Eduardo Fleites investor@mcafee.com
Media Contacts:
McAfee: media@mcafee.com
Advent: Anna Epstein or Sophia Templin Finsbury Glover
Hering Adventinternational-US@finsbury.com
Permira: Nina Suter Nina.Suter@permira.com +44 207
9594037
James Williams james.williams@permira.com +44 774 7006407
OR
Brooke Gordon/Megan Bouchier/Devin Broda Sard Verbinnen & Co
permira-svc@sardverb.com
CPP Investments: Frank Switzer Managing Director,
Investor Relations fswitzer@cppib.com T: +1 416-523-8039
Crosspoint Capital Partners: Jonathan Marino Vice
President jmarino@prosek.com 718 536 4990
TPG: media@tpg.com
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