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Intel considers sale of security business

Intel is reportedly considering the sale of its security business to generate capital as the company restructures

Chip maker Intel is reportedly considering selling its security business five years after completing its $7.7bn acquisition of McAfee and just two years after rebranding it as Intel Security.

Intel justified the acquisition by outlining plans to push security to every device through building a baseline security capability into every chip.

But those plans have not come to fruition and some of the key executives at Intel who led the acquisition and championed the concept of hardware-based security have since left the company.

These include former CEOs David DeWalt, who went to FireEye in 2012; Mike DeCesare, who went to ForeScout in 2014; and former Intel president Renée James, who went to The Carlyle Group in early 2016.

Intel has been forced to restructure to focus on datacentres for the cloud industry and mobile and wearable technology in the face of the global slowdown in PC shipments.

As part of the restructuring exercise, Intel announced plans to cut 12,000 jobs in the next year, or 11% of its global workforce, which is expected to save the company $750m in 2016.

In first quarter financial results, the Intel security group was one of the best performers, with revenue of $537m, up 5% on the previous quarter and up 12% year-over-year.

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Intel Security is therefore a key asset for the company that could help recoup the $7.7bn acquisition cost or even more if the right buyer can be found.

The Financial Times (FT) reports that due to the increased interest from private equity (PE) buyers in cyber security companies, a group of PE firms may form an alliance to buy Intel Security.

Citing people close to the discussion, the FT said the deal for Intel security as one of the few remaining dedicated security businesses could be one of the largest in the sector.

Read more on Privacy and data protection

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Seems like Intel Security being up 5% to $537 million would be a pretty good asset to have in your pocket, despite the lure of a potential increase on the $7.7 billion price they paid. Makes you wonder if the hardware-based security they were working on ran into issues and the restructuring to focus on cloud is just an excuse to save a little face.
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