McAfee Corp IPO: What Investors Need To Know

Cybersecurity company McAfee is set to return to the public markets with this week’s IPO.

The Offering: McAfee Corp MCFE raised $740 by selling 37 million shares at $20 each. This came in towards to the low end of the company’s pricing range of $19 to $22.

On Wednesday evening, the company price 37 million class A common stock shares at $20 per share. This pricing gave McAfee a valuation of $8.6 billion.

About McAfee: McAfee is a pioneer and leader in protecting consumers, enterprises and governments from cyberattacks. The company has over 30 years of experience in the industry, and its average contract length is more than 20 years with its customers.

Intel Corporation INTC bought publicly traded McAfee for $7.7 billion in 2011. In 2017, Intel sold the majority of the company at a valuation of $4.2 billion.

Intel will own 1.8% of the company after the offering, with Thomas Bravo owning 12.6% and TPG owning 54.8%.

Related Link: IPO Outlook: McAfee, Cloud Company Datto Lead The Week

Financials: McAfee’s revenue has grown from $1.9 billion in 2011 to $2.6 billion in 2019. The company reported a net loss of $236 million in 2019. Revenue hit $1.6 billion in the first six months of 2020. A net loss of $31 million was reported for the first six months of 2020.

In 2019, 53.4% of the company’s revenue came from the United States with the rest from international markets.

The company splits its revenue into two segments of consumer and enterprise. In fiscal 2019, these two segments were fairly evenly split with $1.30 billion in revenue for consumers and $1.33 billion for enterprise.

Growth Plans: McAfee sees an increase in internet and mobile users as one of its paths to growth. There is also an increasing number of cyber-attacks being done every year.

The shift to a digital workplace is listed as an area for growth for McAfee. As people work from home, companies need to secure their workers’ digital assets.

McAfee sees an addressable market of $30.4 billion in 2020. The company expects its total addressable market to grow at a compound annual growth rate of 7.9% through 2024.

Listed among the company’s growth plans are continuing to leverage its strong brand, pursuing targeted acquisitions, investing in new routes to market, enhancing the renewal process and focusing on winning in its device to cloud platform.