Intel acquires McAfee for $7.68 billion

Intel to accumulate McAfee

NEWS HIGHLIGHTS:

* Purchase of all of McAfee’s common stock for $48 per share in cash, valuing the deal at approximately $7.68 billion. McAfee will operate as a totally-owned subsidiary, reporting into Intel’s Software and Services Group.
* Acquisition enables a mix of security software and hardware from one company to ultimately better protect consumers, corporations and governments as billions of devices – and the server and cloud networks that manage them – log on.
* Intel elevates specialize in security on par with energy-efficient performance and connectivity. The acquisition augments Intel’s mobile wireless strategy, helping to raised assure customer and consumer security concerns as these billions of devices connect.
* Intel has made quite a few software-related acquisitions of leaders in their respective industries that also have faith in great silicon, including Wind River, Havok and now McAfee.

SANTA CLARA, Calif.–(BUSINESS WIRE)–Intel Corporation has entered into a definitive agreement to amass McAfee, Inc., throughout the purchase of all the company’s common stock at $48 per share in cash, for about $7.68 billion. Both boards of directors have unanimously approved the deal, that’s expected to close after McAfee shareholder approval, regulatory clearances and other customary conditions specified within the agreement.

The acquisition reflects that security is now a fundamental portion of online computing. Today’s security approach doesn’t fully address the billions of latest Internet-ready devices connecting, including mobile and wireless devices, TVs, cars, medical devices and ATM machines in addition as the accompanying surge in cyber threats. Providing protection to a diverse online world requires a fundamentally new approach involving software, hardware and services.

Inside Intel, the company has elevated the priority of security to be on par with its strategic focus areas in energy-efficient performance and Internet connectivity.

McAfee, which has enjoyed double-digit, year-over-year growth and nearly 80 percent gross margins last year, turns into an entirely-owned subsidiary of Intel, reporting into Intel’s Software and Services Group. The gang is managed by Renée James, Intel senior vice chairman, and general manager of the gang.

” With the rapid expansion of growth across an enormous array of Internet-connected devices, increasingly of the elements of our lives have moved online,” said Paul Otellini, Intel president and CEO. ” Before, energy-efficient performance and connectivity have defined computing requirements. Looking forward, security will join those as a third pillar of what people demand from all computing experiences.

” The addition of McAfee products and technologies into the Intel computing portfolio brings us incredibly talented people with a track record of delivering security innovations, services that the industry and consumers trust to make connecting to the web safer and more secure,” Otellini added.

” Hardware-enhanced security will bring about breakthroughs in effectively countering the increasingly sophisticated threats of today and tomorrow,” said James. ” This acquisition is in step with our software and services option to deliver an excellent computing experience in fast-growing business areas, especially around the move to wireless mobility.”

” McAfee is your next step in this strategy, and the proper security partner for us,” she added. ” Our current work together has impressive prospects, and we stay up for introducing a product from our strategic partnership next year.”

” The cyber threat landscape has changed dramatically during the last few years, with millions of latest threats appearing every month,” said Dave DeWalt, president and CEO of McAfee. ” We believe this acquisition will induce our ability to deliver a safer, more secure and trusted Internet-enabled device experience.”

McAfee, based in Santa Clara and founded in 1987, is the sector’s largest dedicated security technology company with approximately $2 billion in revenue in 2009. With approximately 6,100 employees, McAfee’s products and technologies deliver secure solutions and services to consumers, enterprises and governments all over and include a powerful sales force that works with numerous customers.

The company has a set of software-related security solutions, including end-point and networking services which are targeting helping to make certain Internet-connected devices and networks are shielded from malicious content, phony requests and unsecured transactions and communications. Among others, products include McAfee Total Protection™, McAfee Antivirus, McAfee Internet Security, McAfee Firewall, McAfee IPS in addition as an expanding line of products targeting mobile devices akin to smartphones.

Intel has made a chain of recent and successful software acquisitions to pursue a deliberate strategy all in favour of leading companies in their industry delivering software that takes benefit of silicon. These include gaming, visual computing, embedded device and machine software and now security.

Home to two of essentially the mostsome of the most innovative labs and research inside the high-tech industry, Intel and McAfee can even jointly explore future product concepts to further strengthen security within the cloud network and myriad of computers and devices people use in their everyday lives.

On a GAAP basis, Intel expects the mix to be slightly dilutive to earnings inside the first year of operations and approximately flat inside the second year. On a non-GAAP basis, excluding a one-time write down of deferred revenue when the transaction closes and amortization of acquired intangibles, Intel expects the aggregate to be slightly accretive inside the first year and improve beyond that.

Intel was advised by Goldman Sachs & Co. and Morrison & Foerster LLP. McAfee was advised by Morgan Stanley & Co. Inc. and Wilson Sonsini Goodrich & Rosati, P.C.

About Intel

Intel (NASDAQ:INTC) is a global leader in computing innovation. The company designs and builds the fundamental technologies that serve as the inspiration for the realm’s computing devices. More information about Intel is obtainable at www.intel.com/pressroom and blogs.intel.com.

About McAfee

McAfee, Inc. (NYSE:MFE), headquartered in Santa Clara, California, is the realm’s largest dedicated security technology company. McAfee is committed to relentlessly tackling the arena’s toughest security challenges. The company delivers proactive and proven solutions and services that help secure systems and networks worldwide, allowing users to soundly hook up with the net, browse, and shop the online more securely. Backed by an award-winning research team, McAfee creates innovative products that empower home users, businesses, the public sector, and service providers by enabling them to prove compliance with regulations, protect data, prevent disruptions, identify vulnerabilities, and continuously monitor and improve their security. http://www.mcafee.com.

FORWARD LOOKING STATEMENTS SAFE HARBOR

This press release contains certain forward-looking statements in regards to the proposed transaction between Intel and McAfee, including but not limited to statements in regards to the future demand for security; the effectiveness of hardware security; plans to introduce a product due to the strategic partnership in 2011; benefits of the proposed transaction; future products and ideas to increase security, particularly with respect to cloud computing and mobile devices and Intel’s expectations concerning the proposed transaction’s effects on its GAAP and non-GAAP results. Actual events or results may differ materially from those contained in these forward-looking statements. One of several important factors that might cause future events or results to change from those addressed within the forward-looking statements include without limitation, risks and uncertainties arising from the chance that the closing of the transaction can be delayed or would possibly not occur; difficulties with the combination process or the belief of some great benefits of the transaction; general economic conditions inside the regions and industries through which Intel and McAfee operate; and litigation or regulatory matters involving antitrust and other issues that would affect the closing of the transaction. Furthermore, please consult with the documents that Intel and McAfee file with the SEC on Forms 10-K, 10-Q and 8-K. The filings by Intel and McAfee identify and address other important factors that would cause events and results to differ materially from those contained within the forward-looking statements set forth in this press release. Intel and McAfee are under no duty to update any of the forward-looking statements after the date of this press release to evolve to actual results.

Additional info and where to seek out it

McAfee intends to file with the Securities and Exchange Commission (the ” SEC” ) a preliminary proxy statement and a definitive proxy statement and other relevant materials in connection with the merger. The definitive proxy statement will probably be sent or given to the stockholders of McAfee. Before making any voting or investment decision with respect to the merger, investors and stockholders of McAfee are urged to read the proxy statement and the alternative relevant materials once they become available because they’ll contain important information concerning the merger. The proxy statement and other relevant materials (after they become available), and any other documents filed by McAfee with the SEC, could be obtained for free at the SEC’s website, at www.sec.gov, at McAfee’s website at www.McAfee.com (click on ” Investor Information” , then on ” SEC Filings” ) or from McAfee by contacting Investor Relations by mail at McAfee, Inc., 3965 Freedom Circle, Santa Clara, California 95054, Attention: Investor Relations, or by telephone at (408) 346-5223.

Participants within the Solicitation

McAfee and Intel and their respective directors and executive officers could be deemed to be participants within the solicitation of proxies from McAfee stockholders in connection with the merger. Information about Intel’s directors and executive officers is decided forth in Intel’s 2010 proxy statement on Schedule 14A filed with the SEC on April 2, 2010 and its Annual Report on Form 10-K for the year ended December 26, 2009, filed on February 22, 2010, respectively. Information about McAfee’s directors and executive officers is ready forth in its 2010 proxy statement on Schedule 14A filed with the SEC on April 30, 2010 (as revised on May 10, 2010). Additional info in regards to the interests of participants within the solicitation of proxies in connection with the merger shall be included within the proxy statement that McAfee intends to file with the SEC.

Intel and the Intel logo are trademarks of Intel Corporation inside the Usa and other countries.

McAfee, McAfee Labs and Global Threat Intelligence are registered trademarks or trademarks of McAfee, Inc. or its subsidiaries inside the U.s. and other countries. Other marks and brands can be claimed as the property of others. © 2010 McAfee, Inc. All rights reserved.

* Other names and brands can be claimed as the property of others.

EDITOR’S NOTE: A conference call hosted by Intel and McAfee executives is planned for 7 a.m. PDT. To view the webcast live, please visit http://intelstudios.edgesuite.net/100819_intel/index.htm.