Intel buying security software maker McAfee

SAN JOSE, Calif. – In a move that greatly accelerates its surge into the software market, chip-manufacturing giant Intel announced Thursday that it has agreed to buy security-software maker McAfee for $7.68 billion, the biggest purchase Intel has ever made.

Under the deal, which the boards of both Santa Clara, Calif., companies have blessed pending approval by McAfee’s shareholders and government regulators, Intel has agreed to buy all of McAfee’s common stock for $48 a share. That represents a 60 percent premium based on McAfee’s $29.93 share price at the close of trading Wednesday.

Intel, which dominates the market for chips that are used in personal computers, said it sees the acquisition of McAfee as a key element of its push to get its chips into smart phones and other types of devices.

“With the rapid expansion of growth across a vast array of Internet-connected devices, more and more of the elements of our lives have moved online,” Intel CEO Paul Otellini said in a prepared statement. “In the past, energy-efficient performance and connectivity have defined computing requirements. Looking forward, security will join those as a third pillar of what people demand from all computing experiences.”

Dave DeWalt, McAfee’s CEO, added that “the cyberthreat landscape has changed dramatically over the past few years, with millions of new threats appearing every month. We believe this acquisition will result in our ability to deliver a safer, more secure and trusted Internet-enabled device experience.”

Intel spokeswoman Suzy Ramirez said the McAfee deal would be the biggest ever made by Intel, which was founded in 1968. It also would greatly boost Intel’s fast-growing core of software employees. McAfee, which reported sales of about $2 billion last year, has about 6,100 employees.

Although Intel does not disclose the size of its software work force, Ramirez said Intel’s Software and Services Group “employs thousands of software-focused professionals, and measured by engineering staff size, SSG would be among the world’s top 10 software companies if it were an independent organization.”

In June 2009, Intel bought Alameda, Calif., software company Wind River Systems for $884 million, at that time Intel’s biggest purchase in more than eight years. In recent year, the chipmaker also has snapped up five other software companies: Havok, Neoptica, Offset, OpenedHand and Swiftfoot Graphics.