TPG-backed McAfee to raise $620m from IPO

McAfee, the cyber security company whose eponymous founder was recently arrested on tax avoidance charges, priced its shares in the lower half of its initial public offering range despite the hot market for newly listed software companies.

Public investors agreed to purchase shares at $20 each, according to people briefed on the discussions, delivering about $620m in proceeds the company plans to mostly put toward its almost $4.8bn debt load. 

At the offering price, McAfee would command a market capitalisation of about $8.6bn, based on the number of shares outstanding. Existing investors were also prepared to sell more than $100m in shares through the offering. The company did not immediately respond to requests for comment.

McAfee enters a buoyant market for software companies, as businesses increasingly rely on their services to manage the shift to remote working during the pandemic. 
The offering marks a return to public markets for one of the most well-known names in cyber security, whose fortunes have fluctuated in the past decade as it passed between different owners.

McAfee’s current iteration emerged after a period of ownership under the chipmaker Intel, which purchased the company for $7.7bn in 2010. Intel later renamed the business Intel Security. 

In 2016 the private equity group TPG led a spin out that valued the group at $4.2bn, including debt, restoring its original brand name. It has since made a series of acquisitions focused on cloud computing services, a growing area of focus.

McAfee made a profit of $31m on revenues of $1.4bn in the first half of 2020, after recording net losses of $236m last year. 

The listing comes during a blockbuster year for IPOs in which companies have raised $58.4bn in the US, according to the data provider Refinitiv, making it the busiest period since Alibaba’s listing broke records in 2014.

Source: Financial Times