Antivirus pioneer McAfee Corp. announced its closure. Valued at $ 14 billion, the company will be owned by a group of investors led by Advent International and Permira Advisers. The cash trade represents a 22.6% premium over the company’s closing price of $ 21.21 from the start of the month.
Structured as a reverse triangular merger, this deal includes a shopping provision, allowing McAfee to solicit competing offers from other suitors for 45 days. According to the Matterhorn Mergers and Acquisitions Database, which harnesses both AI and lawyers to digest the granular transaction points of publicly announced deals, such arrangements have become rare, with only 5.77% of deals announced this year including such a provision. And the 45-day period is among the longest shopping spans this year – the span ranged from 26 to 45 days, with an average of 38 days.
McAfee legal advisers are Ropes & Gray and Moulton Moore Stella, and financial advisers Goldman Sachs & Co. LLC and Morgan Stanley. The group of private equity investors is advised by Fried, Frank, Harris, Shriver & Jacobson, and financial advisers led by JPMorgan and Bank of America.
This agreement is the last in the history of McAfee’s revolving doors as a public company. Just in October 2020, McAfee went public, raising $ 740 million when it went public. And it wasn’t the first time that McAfee went public – and it wasn’t the first time that McAfee went private, either. McAfee was publicly traded until 2011, when it was acquired by Intel, which then sold a controlling stake in the company to private equity firm TPG.
Founded in 1987, McAfee was an early industry leader alongside longtime rival Norton. But the company has would have struggled amid fierce competition from emerging competitors looking to tackle growing cybersecurity threats.
This transaction demonstrates the growing trend for companies to move from public to private status while juggling the changing pros and cons of each. In recent years, SPACs have become a popular way to go public while avoiding some of the rigors and regulations of the traditional IPO process. We work, DraftKings, and Forbes are just a few of the big names following the Wall Street IPO via the SPAC trend.
But while many companies have recently been drawn to the liquidity of public markets, others, like McAfee, are moving in the opposite direction. Privatization not only allows companies to avoid certain regulations and disclosure obligations, but also allows them to focus on a longer-term strategy rather than dealing with the pressures of quarterly public expectations.
According to the joint Press release, McAfee applauds the additional financial and operational resources this agreement brings to the business, writing, “As consumers face new and complex cyber risks, we see a tremendous opportunity to build on the platform. differentiated technology from McAfees to continue to deliver innovative solutions that can protect all facets of the digital lives of people around the world.
Logan Beirne is a lawyer, entrepreneur and scholar. He is CEO of Matterhorn Transactions, Inc., an AI-powered tech company that provides M&A analysis to thousands of law firms in the US, UK and Canada. In addition to its public transaction systems, Matterhorn also customizes and hosts databases of private transaction-related documents for law firms. Using proprietary software and analytical expertise, Matterhorn databases provide unprecedented insight into proprietary agreement document databases and dramatically improve the management and analysis of precedents.
Logan has served on the board of directors of 5 organizations and on the board of directors of one 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 Chairman, 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.
Previously, Logan was a lawyer at Sullivan & Cromwell LLP and worked in private equity at GE Capital. He received his BS from Fairfield University, was a Fulbright Fellow at Queen’s University, and received his JD from Yale Law School.