Intel Corp. said it will spin out its cyber security division, formerly known as McAfee, and sell a majority stake in it to investment firm TPG for US$3.1 billion in cash.
TPG will own 51 percent of the new entity, valuing the entire company at US$4.2 billion including debt, Reuters reports.
Intel, which bought McAfee for US$7.7 billion in 2011, will retain a 49 percent stake in the business, the news agency said.
The deal ends a failed effort by Intel to stake out a major position in the computer security business.
At the time of the acquisition, Intel spoke of integrating McAfee security technology into its chips, but little came of those plans.
The unit, rebranded as Intel Security Group in 2014, will revert to the McAfee brand name following the closing of the deal, expected in the second quarter of 2017.
McAfee’s founder, John McAfee, was for a time on the run from a murder investigation in Belize and is a pariah in the industry.
He recently sued Intel to get back the right to use his name.
TPG, which is making a US$1.1 billion equity investment in the company, first approached Intel’s board about a potential transaction for McAfee around a year ago, sources familiar with the matter said.
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