Antivirus pioneer McAfee Corp. announced that it will be going private. Valued at $14 billion, the company will be owned by an investor group led by Advent International and Permira Advisers. The all cash deal represents a 22.6% premium over the corporation’s closing price of $21.21 from earlier this month.
Structured as a reverse triangular merger, this deal includes a go-shop provision, permitting McAfee to solicit competing offers from other suitors for 45 days. According to Matterhorn’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly announced transactions, such provisions have become a rarity, with only 5.77% of deals announced this year including such a provision. And the 45 day period is among the longest go-shop durations this year – the duration ranged from 26 to 45 days, with a mean of 38 days.
McAfee’s legal advisors are Ropes & Gray and Moulton Moore Stella, and financial advisors Goldman Sachs & Co. LLC and Morgan Stanley. The private equity investor group is advised by Fried, Frank, Harris, Shriver & Jacobson, and financial advisors led by JPMorgan and Bank of America.
This deal is the latest in McAfee’s revolving door history as a public company. Just in October 2020, McAfee went public, raising $740 million in their IPO. And that was not McAfee’s first time going public – nor is this its first time going private. McAfee had been public until 2011, when it was acquired by Intel, which later sold a majority stake in the company to private equity firm TPG.
Founded in 1987, McAfee was an early leader in the industry alongside longtime rival Norton. But the company has reportedly struggled amid fierce competition from emerging competitors seeking to combat the proliferating cybersecurity threats.
This transaction demonstrates the growing trend for companies to jump back and forth between public and private status as they juggle the changing advantages and disadvantages of each. Over the past few years SPACs have become a popular means of going public while avoiding some of the rigors and regulations of the traditional IPO process. WeWork, DraftKings, and Forbes are just a few of the big names following Wall Street’s going public via SPAC trend.
But while many companies have recently been drawn to the liquidity of public markets, others, like McAfee are heading in the opposite direction. Going private permits companies not only to avoid certain regulations and disclosure requirements, but also frees them to focus on longer term strategy rather than face the pressures of quarterly public expectations.
According to the joint press release, McAfee welcomes the additional financial and operational resources that this deal brings to the company, writing “As consumers face new and complex cyber risks, we see tremendous opportunity to build on McAfees differentiated technology platform to continue delivering innovative solutions that can protect all facets of the digital lives of people around the world.”
Logan Beirne is a lawyer, entrepreneur, and academic. He serves as CEO of Matterhorn Transactions, Inc., an AI-powered tech company that provides M&A analytics to thousands of law firms across the US, UK, and Canada. In addition to its public deal systems, Matterhorn also customizes and hosts databases of private deal-related documents for law firms. Using proprietary software and analytic expertise, Matterhorn’s databases provide unprecedented insight into proprietary deal-document databases, and significantly enhance precedent management and analysis.
Logan has served on the board of directors of 5 organizations and the board of governors of a municipality. He also teaches Financial Markets, Corporate Law, and Business Ethics at Yale Law School. His bestselling book, Blood of Tyrants: George Washington, the Forging of the Presidency, won the 2014 Colby Award and the Lincoln Medal. Beirne and his writings have been featured by The New York Times, The Wall Street Journal, USA Today, The Washington Times, Reuters, National Review, and other media outlets.
Previously, Logan was an attorney at Sullivan & Cromwell LLP and worked in private equity at GE Capital. He received his BS from Fairfield University, was a Fulbright Scholar at Queen’s University, and received his JD from Yale Law School.