McAfee Value Could Be $5 Billion in IPO Later This Year

McAfee reportedly is planning once again to become a public company, a move one analyst said likely was prompted by the success of recent cybersecurity initial public offerings (IPOs) like CrowdStrike.

Increasing cash flow under McAfee CEO Chris Young has prompted the plan to return to the public market, the Wall Street Journal reported. The IPO could come this year and could raise at least $1 billion, valuing McAfee at more than $5 billion, it said.

McAfee spokesperson Jaime Le said her company doesn’t comment on rumors and is focused on “running the business, executing on our 2019 plan and serving our customers.”

Eric Parizo, senior analyst with Ovum, tells Channel Partners the move to accelerate IPO efforts likely is a reaction to the positive market environment, particularly for tech and security IPOs like Crowdstrike and Tufin. The rumored Symantec buyout by Broadcom adds fuel to the fire, he said.

Ovum’s Eric Parizo

“The IPO plans are in large part driven by an ownership group that, strangely, has been somewhat impatient for McAfee to turn things around,” he said. “Despite a broad understanding in the industry that modernizing its aging product portfolio and acquiring the additional technologies needed to compete effectively would require a multiyear effort, majority owner TPG and minority owner Intel have both shown signs of unwillingness to wait out that process. I wouldn’t be surprised if the strong market has given them the impression that an IPO is their best, fastest route to an exit.”

McAfee has made progress on cash flow since its Skyhigh Networks acquisition through synergistic business realignments, and it has shown strategic progress with the launch of its MVision set of cloud-based security solutions, Parizo said.

Tony Massimini, senior industry analyst, information and network security at Frost & Sullivan, said Broadcom acquiring Symantec would benefit McAfee if it became a public company. Symantec likely wouldn’t be publicly traded on its own anymore, and therefore McAfee would emerge as one of the leaders in publicly traded cybersecurity, he said.

In the meantime, Young is “running a tight ship and streamlining operations; they are very focused and presenting a very strong vision and road map of where they want to go,” he said.

And if McAfee is planning an IPO, “anything with cybersecurity is going to be hot right now,” Massimini said.

“Certainly an IPO would give McAfee more resources,” he said.