Cybersecurity-software company McAfee could be making a return back to the public markets, joining a number of other multi-billion-dollar tech IPOs that have occurred in 2019. While nowhere near the size of some of the larger IPOs such as Uber, its return will be much anticipated by investors.
According to The Wall Street Journal, McAfee’s owners are meeting with investment bankers this week in order to discuss a possible listing in the public markets which could take place as soon as this year.
Anonymous sources reported in the story that McAfee’s IPO would be relatively small, raising only $1 billion in the offering and would give the software company a valuation of around $5 billion, although there’s no guarantee it will achieve even that much.
Currently, the company is owned by private-equity firms Thomas Bravo and TPG, alongside Intel Corp. Previous private valuations of the company are at $2.15 billion, or $4.2 billion including outstanding debt, when TPG agreed to buy a 51 percent stake from Intel to set up McAfee as an independent company. McAfee first went public in 1999, one of the few survivals from the internet tech bubble, and was bought out by Intel in 2011 for $7.5 billion.
Since then, McAfee has seen its cash flows increase through a number of strategic changes as well as some key acquisitions. This includes the buyout of cloud-security provider Skyhigh Networks as well as a VPN-company called TunnelBear in 2018.
While McAfee’s current owners have considered an outright sale of the company in the past, anonymous sources have said that they are optimistic about the prospect of an IPO.
Despite the concerns that investors might have had enough of the already numerable, and in many cases disappointing, tech IPOs so far in the year, McAfee’s owners are supposedly more optimistic about an IPO than through finding a private deal, although they haven’t ruled out such a possibility.
When looking at how McAfee’s closest public comparisons have done, companies like Symantec, Avast, and Palo Alto Networks, they have all been trading well, which is part of the reason why an IPO for McAfee seems like a solid option.
While many tech IPOs have struggled, cybersecurity offerings have been fairly scarce, suggesting there could still be plenty of further demand for these types of companies. Shares of cloud-based cybersecurity software maker CrowdStrike Holdings is trading around double the original $34 price it debuted last month.
The original founder of the company, John McAfee, despite his continued fame amidst the cryptocurrency and cybersecurity ecosystems, isn’t actively involved in managing his company anymore, having left the firm in 1994 and moved to Believe.
Shockingly enough, he has been putting all the more distance between himself and his former company. He went on to tweet that “for those of you blaming me for the problems with McAfee Antivirus software: when I was still the CEO, the software was flawless. I took the company public and left more than 20 years ago.” When one Twitter user asked him which anti-virus program to use, he responded by saying “none. Anti-virus software doesn’t work anymore.”
Despite his bold statements, it’s likely that the McAfee IPO will still be highly lucrative for investors looking to make a quick buck.