Security vendor enlists investment banks as it prepares to return to the public market
Wall Street is hot for security companies, which may be drawing industry and channel stalwart McAfee back to the stock market. Bloomberg is reporting that McAfee hired two investment banks to chart the company’s stock offering, which could value the company at $8 billion.
The Lowdown: McAfee is prepping for its annual MPOWER event, where it’s expected to continue beating the drum on its cloud security strategy. Growing speculation is that McAfee will announce an equity plan sometime this fall, and the report that the company hired Morgan Stanley and Bank of America to guide its return to the stock market is fueling that speculation.
The Details: McAfee and its current owners – private equity firms TPG and Thoma Bravo, as well as Intel Corp. – aren’t commenting on or confirming the reports. Sources cited by Bloomberg indicate that McAfee is exploring other options, and the return to the public market is not a guarantee.
The Impact: A company like McAfee going public will have little initial impact on its go-to-market strategy or channel relationships. If anything, McAfee’s channel is a contributing strength that many of its rival start-ups that have gone public don’t have. If McAfee does an IPO and gets an initial valuation of $8 billion, it will become the latest in a string of security stock offerings that wowed Wall Street.
Earlier this spring, start-up rival CrowdStrike went public, running up a valuation that nearly equaled its much larger and established rival Symantec. In April, security policy management vendor Tufin went public and its stock has climbed 25% from its public offer. And cloud security platform vendor Zscaler has surprised the market with more than 300% growth since going public in 2018.
Background: In 2011, Intel surprised the technology market by buying McAfee for $7.7 billion. Intel planned to leverage McAfee’s technology to bolster silicon-based security. The two companies’ products and cultures never fit well together and, in 2016, Intel sold a majority stake of McAfee to private equity firm TPG Capital. Private equity firm Thoma Bravo has a minority stake in McAfee.