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Intel to buy McAfee for $7.7 Billion

dealbook.blogs.nytimes.com

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Re: Intel to buy McAfee for $7.7 Billion

#51

Post by BrandonM »

reitzensteinm wrote: post #29
BrandonM wrote: post #19

Earlier quoted context omitted.

We're talking about $7.7 billion . I'm not sure it's quite as rosy a picture as you paint. I'm not that familiar with McAfee's annual profits, but even if they make $500 million a year, we can value the talent they cherry-pick at an absurdly high value of $1 billion, and it would still take Intel well over 10 years to recoup the investment, assuming stable revenue streams.

$173 million in 2009, up from $172 in 2008 and $166 in 2007. It seems odd to make an assumption when the real answer is seconds away!

Thanks, I was about to head into a meeting and didn't have time to do the research. Assuming $175 million in profits per year, that means 44 years to breakeven, ignoring the talent acquisition angle. How much are 20 (or even 50) good programmers worth?

Re: Intel to buy McAfee for $7.7 Billion

#52

Post by afterburner »

secret wrote: post #43
Groxx wrote: post #36

Heard via NPR this morning: Intel stocks are down a few %, while McAfee is up over 50% . Seems investors think this is better for McAfee than Intel, too.

Intel offered 60% more than McAfee was worth yesterday. Basically if you buy MFE now (up 57% as I write), you're essentially just buying a bond with a 3% return between now and when the stock switches to Intel. Of course, there's always a chance the deal isn't completed for whatever reason. As for Intel going down, I would sell too. I don't really see how this deal makes sense.

The purchaser's stock typically goes down because the company just spent a lot of money... whether loaned or not.

Re: Intel to buy McAfee for $7.7 Billion

#53

Post by mcknz »

shadowfox wrote: post #40
mcknz wrote: post #37

Earlier quoted context omitted.

Intel decided to do a public good, and plans to remove all McAfee antivirus software from the planet.

Is McAfee really that bad?

In April they issued an update that accidentally targeted legitimate Windows system files, causing the updated boxes to bluescreen. Astounding enterprise-level incompetence.

Re: Intel to buy McAfee for $7.7 Billion

#54

Post by d2viant »

eru wrote: post #44
mnemonicsloth wrote: post #4

...for a 60% price premium. Right now, large companies have so much cash available to them, on such attractive terms, that acquisitions don't have to be a terribly good fit to be attractive. It's just time to buy.

How about paying dividends?

Or buying back shares.

Re: Intel to buy McAfee for $7.7 Billion

#55

Post by maukdaddy »

BrandonM wrote: post #19
jakevoytko wrote: post #12

Earlier quoted context omitted.

McAfee also has strong UI programming expertise that Intel sorely needed. Intel's IPP and MKL libraries are absolutely great, but VTune looks like it is fresh out of 2002. They get access to several stable revenue streams (like antivirus), and can cherry-pick talent to work on whatever projects they want. There aren't many downsides for Intel.

We're talking about $7.7 billion . I'm not sure it's quite as rosy a picture as you paint. I'm not that familiar with McAfee's annual profits, but even if they make $500 million a year, we can value the talent they cherry-pick at an absurdly high value of $1 billion, and it would still take Intel well over 10 years to recoup the investment, assuming stable revenue streams.

A simplified perpetuity of $175m @ 6% would have a PV of ~= 3b. I'm having trouble seeing how they'd ever break even based on profits alone. I just can't imagine what kind of integration with existing products they think will add another 4.7b.

Re: Intel to buy McAfee for $7.7 Billion

#57

Post by omouse »

This makes perfect sense and will further drive us to buy more and "better" hardware. The software will slow down the comp so much so that you'll want to continually buy new hardware in the hopes of making things run faster! Intel is an evil genius.

Re: Intel to buy McAfee for $7.7 Billion

#58

Post by c1sc0 »

jakevoytko wrote: post #12
dododo wrote: post #8

Earlier quoted context omitted.

McAfee do more than just desktop antivirus: for example, they have mobile, virtualisation and network security products. see products by category here: http://www.mcafee.com/uk/enterprise/index.html Intel has a large interest in mobile, virtualisation and network arenas; this isn't really as surprising as you make out.

McAfee also has strong UI programming expertise that Intel sorely needed. Intel's IPP and MKL libraries are absolutely great, but VTune looks like it is fresh out of 2002. They get access to several stable revenue streams (like antivirus), and can cherry-pick talent to work on whatever projects they want. There aren't many downsides for Intel.

Are you kidding me? McAfee creates great UIs? Since when?
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