Network Associates is to sell off its Sniffer family of network management software and change its name to McAfee, as part of an effort to cut costs and boost profitability.
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Network Associates will sell the Sniffer assets for $275m in cash to Silver Lake Partners and Texas Pacific Group.
The private equity firms will turn the Sniffer business into a new, standalone company called Network General, which will continue to develop, support and market the products.
The companies expected the sale to close in the third quarter, subject to regulatory approvals, at which time Network Associates will change its name to McAfee.
It considered McAfee to be a better known, more powerful brand than Network Associates, said George Samenuk, the company's chairman and chief executive.
Network Associates also expected to report net revenue of $217m for its first financial quarter.
The goal of the changes is to streamline the company around security products and boost operating margins to 25% by mid-2005, Samenuk said. To achieve that goal, Network Associates is also rearchitecting its back-end systems and revamping its channel programme.
The Sniffer products, which are used by businesses to manage the performance of networks and applications, had not been meeting targets for profit and growth, Samenuk said.
They are the company's last remaining products not related to security, after it sold its Magic line of help desk and management products to BMC Software late last year.
"It's our goal to minimise as much as possible the transition issues faced by our Sniffer customers. Most of the large McAfee customers are also Sniffer customers, so we want [the new company] to be wildly successful," Samenuk said.
The Sniffer group employed between 450 and 500 people, or 15% of Network Associates' workforce, and the majority will become part of Network General. The change will reduce Network Associates' revenue by about $200m this year.
James Niccolai writes for IDG News Service