The logic is fairly clear. PC sales, the center point for both Intel and McAfee, are declining. Computing is becoming mobile while security is becoming cloud-based. So while Intel must address the mobile challenge for its chips, McAfee is widening its security and strengthening its cloud offerings.
Stonesoft itself is a relatively small but technically advanced company. It is perhaps best-known for last year’s discourse on what it terms advanced evasion techniques (the way in which attackers and malware avoid detection by traditional security products), and its ability to block them. The company is categorized as ‘visionary’ in Gartner’s 2013 Network Security Firewall Magic Quadrant.
Although the acquisition will need to be sanctioned by the Finnish government (because Stonesoft products have military applications) and approved by shareholders, the deal seems to be a good one. Stonesoft made a small profit last year (€685,000 on net sales of €40.1 million), but this was the first profit since it was listed in 1999. According to the Wall Street Journal, McAfee’s offer “represents a 142% premium to the volume-weighted average price of Stonesoft shares during the past 12 months, according to Stonesoft. The Intel unit would pay €4.5 ($5.9) in cash for each Stonesoft share.”
The offer on Monday is actually twice Stonesoft’s Friday closing price, and it caused an immediate surge in value – Stonesoft shares rose as high as €4.48 and closed at €4.45.
The deal is generally considered to be good for both parties. “The mega-trend for cyber security isn’t showing any signs of slowing down as you’re always hearing about some corporation being hacked,” said Mikael Rautanen, an analyst at Inderes Oy in Helsinki (reported by Bloomberg). “Stonesoft has the potential to see strong growth so this is a pretty good deal for Intel, and the offer price makes it a good deal for Stonesoft shareholders.”
According to The Wall Street journal, “Stonesoft Chief Executive Ilkka Hiidenheimo said potential threats that exist in cyberspace have evolved and the tie-up with McAfee will offer ‘a 360-degree solution’ for those seeking safeguards against devastating scenarios.”
McAfee says that Stonesoft will remain in Finland (becoming its sixth European operation), and the workforce will expand.