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[Snackman]

Intel To Buy McAfee For $7.68B; $48/Shr; Security Sector Soar
August 19, 2010, 8:56 AM ET

By Eric Savitz

In a stunning development that seems totally out of left field, semiconductor giant Intel (INTC) this morning announced a deal to acquire the security software company McAfee (MFE) for $7.68 billion, or $48 per share in cash. The agreement has been approved by the boards of both companies, but is subject to MFE holder approval and regulatory clearances.

Intel said in a statement that the deal “reflects that security is now a fundamental component of online computing,” adding that “providing protection to a diverse online world requires a fundamentally new approach involving software, hardware and services.”

Intel will become a wholly owned Intel subsidiary, reporting to the company’s software and services group, run by Intel senior VP Renee James.

In a statement, Intel CEO Paul Otellini said that “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. 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.”

McAfee, which like Intel is based in Santa Clara, California, had about $2 billion in revenue in 2009, and has about 6,100 employees. The company sells anti-virus, firewall, intrusion protection and other security software.

Intel said the deal will be slightly dilutive to GAAP earnings in the first year of operations, and about flat in the second year. On a non-GAAP basis, excluding a one-time write-down of deferred revenue and amortization of intangibles, Intel said the deal will be slightly accretive in year one and improve after that.

http://blogs.barrons.com/techtraderdaily/2010/08/19/intel-buys-mcafee-for-768-billion/?mod=yahoobarrons