Paul Hastings and Ropes & Gray are advising on Symphony Technology Group’s (STG’s) $4bn acquisition of McAfee’s enterprise arm, making the San Jose-based cybersecurity giant a pure-play consumer business.
A Paul Hastings team led by San Francisco-based M&A partner Steve Camahort is representing longstanding client STG while the Ropes & Gray team advising McAfee includes private equity partners Mike Roh (Boston) and Howard Glazer (San Francisco).
McAfee’s enterprise business has been a leader in the cybersecurity industry since its establishment more than 30 years ago, sitting as a “trusted partner” for 86% of Fortune 100 firms around the world. But the consumer side of the business has been pulling ahead in terms of revenue, bringing in $1.6bn for the fiscal year 2020 while the enterprise business generated $1.3 bn at a growth rate of just 1%.
The enterprise business faces stiff competition from the likes of CrowdStrike and SentinelOne with other major technology heavyweights including Cisco, Microsoft and VMware pushing further into the cybersecurity market.
The transaction comes less than five months after McAfee completed a $740m initial public offering that valued the company at $9.5bn. Ropes & Gray also advised on that deal – alongside Wilson Solsini – Roh having led the team that advised TPG on its acquisition of a majority stake in the business from Intel in 2017.
STG, meanwhile, has been moving into cybersecurity. Notably, in September last year it purchased Massachusetts-based encryption software RSA for $2.08bn from Dell. It turned to Davis Polk & Wardwell and Baker McKenzie on that deal with Bakers serving as international counsel.
“McAfee is one of the most iconic brands in enterprise security and has a reputation for innovation, quality and leadership,” said STG managing partner William Chisholm. “We are fully committed to driving the business’ strategy to be the leading device-to-cloud cybersecurity company by partnering with McAfee’s existing world-class team to continue delivering exceptional performance to enterprise and government clients globally.”
Among the other Ropes & Gray partners advising on the deal are M&A partner Paul Scrivano (San Francisco and New York), private equity partner Scott Abramowitz (New York), IP transactions partner Megan Baca (Silicon Valley) as well as litigation and enforcement specialists Jonathan Klarfeld, Ama Adams and Maria Calvet (Washington DC), Daniel McCaughey, Randall Bodner and Peter Welsh (Boston), Timothy Farrell (Chicago) and Ruchit Patel (London).
Among those assisting Camahort at Paul Hastings are partners Lucas Rachuba (tax), Jane Song (IP), Dan Stellenberg and Suzanne Horne (employment benefits), Lindsay Sparks (finance), Charles Patrizia (government contracts), Scott Flicker (trade controls), and Sherrese Smith (privacy and cybersecurity).
Last month, Paul Hastings advised on the combination of Oslo-based cloud Transport Administration Systems (TAS) platform Consignor with leading Swedish cloud TAS platform Unifaun.
The McAfee transaction is expected to close by the end of the year, subject to regulatory approvals and closing conditions.