McAfee Corp. has signed an agreement to sell its enterprise cybersecurity business to a consortium led by private equity firm Symphony Technology Group, the company announced today.

The deal is worth $4 billion. McAfee will put $1 billion toward paying off corporate debts and will return the rest, minus transaction-related expenses, to shareholders in the form of a dividend amounting to $4.50 per Class A share.

McAfee is a major player in both the enterprise and consumer cybersecurity markets. Selling off the enterprise business, the company said, will allow it to focus entirely on its consumer unit, which is the larger of the two. It’s also growing significantly faster. 

In the quarter ended Dec. 26, McAfee’s enterprise business increased its sales by 5%, reaching $351 million, and closed the full 2020 fiscal year up 1% year-over-year. The consumer unit, meanwhile, saw revenue jump 23% during the quarter Dec. 26. The unit’s 2020 revenues totaled $1.6 billion, a 20% improvement over 2019.

In the filing for its initial public offering last year, McAfee stated that its consumer security products were running on more than 600 million devices worldwide. The size of its installed base is one of the company’s key competitive advantages in the consumer market. In the filing, McAfee explained that protecting more than 600 million endpoints allows it to collect vast amounts of data on cyberattacks, information that in turn helps improve its security capabilities.

Offloading the enterprise business “will allow McAfee to singularly focus on our consumer business and to accelerate our strategy to be a leader in personal security for consumers,” said McAfee Chief Executive Peter Leav. Investors appear to approve: The company’s stock jumped more than 10% today on the news. 

The resources that the deal will free up could support McAfee’s efforts to expand its sales channels in the consumer market. McAfee relies heavily on partnerships with firms such as personal computer makers to drive software sales. When it went public last year, the company said it was looking to expand partnerships with retailers and internet providers in a bid to boost revenue growth.

As for the enterprise business, it should be a valuable addition to Symphony Technology Group’s portfolio. The business logged $1.2 billion in net revenue last year and counts 86% of the Fortune 500 as customers. 

Moreover, the unit competes in several of the fastest-growing parts of the enterprise security market. McAfee’s enterprise portfolio includes, among others, tools for protecting software container applications and finding configuration issues in public cloud environments. It also has a presence in the so-called secure access service edge or SASE segment, which has drawn significant interest from enterprises and venture capitalists alike.

Under the new ownership, the business can be expected to continue investing in its highest-growth areas. That investment could potentially include strategic acquisitions. Several components of McAfee’s enterprise security portfolio, including its container security capabilities, are partly based on acquisitions it made over the last few years. 

The transaction is expected to close by the end of 2021. It comes about a year after an investor consortium likewise led by Symphony Technology Group inked a deal to buy cybersecurity provider RSA from Dell Technologies Inc. for about $2 billion. 

Photo: McAfee