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McAfee Targets $814M In IPO Funding, Trading Debut Expected On Oct. 22

Security software company McAfee LLC on Tuesday said it planned to sell 37 million shares in its initial public offering. McAfee estimates to price its IPO between $19 and $22, meaning it could raise up to $814 million in the offering.

· 10/14/2020 04:56

Security software company McAfee LLC on Tuesday said it planned to sell 37 million shares in its initial public offering. McAfee estimates to price its IPO between $19 and $22, meaning it could raise up to $814 million in the offering.

What Happened: The company will offer around 83% of the Class A common stock and the balance comes from existing shareholders.

The Intel Corporation (NASDAQ:INTC)-backed security company is expected to price the IPO on Oct. 21 and the stock could begin trading on the Nasdaq Stock Market under the symbol "MCFE" starting Oct 22, according to Barron’s.

Underwriters are entitled to greenshoe options of 5.55 million shares — 22% offered by the company and the remaining by existing stakeholders.

A consortium of eighteen financial entities, including Morgan Stanley (NYSE:MS), Citigroup Inc (NYSE:C), Goldman Sachs Group Inc (NYSE:GS), and Bank Of America Corp (NYSE:BAC), will act as underwriters for the issue.   

Why Does It Matter: Of the total company issued Class A common stock, McAfee plans to use 95% of the proceeds to partially settle a $525 million second-lien term loan and the rest for working capital along with other general corporate purposes. 

On June 27, McAfee’s total debt stood at $4.7 billion, as reported in a filing with the U.S. Securities and Exchange Commission in September.

The cybersecurity company achieved profitability in the first half of the year, reporting a net income of $31 million against a loss of $236 million in the fiscal year 2019.

Based on a 7.9% CAGR projection in the next four years, McAfee estimates a $41.2 billion potential market size by 2024.

Photo by BrokenSphere on Wikimedia