Intel, one off the most established brand names when it comes to microchips, has decided to chip into the software business. On Thursday, Intel spokesperson Suzy Ramirez announced the company’s intention to buy McAfee at $48 per share. This is 60% more than the share price on the close of business Wednesday. It is an all cash deal valued at 7.68 billion.
Speaking during a press conference, Intel’s President and CEO, Paul Otellini, called security the “third pillar of what people demand from all computing experiences.” The company figures wherever they sell a microchip there is also an opportunity to sell software, according to Mr. Otellin.
Following the announcement McAfee shares skyrocketed by $17.08 or 57% to close on Thursday at $47.01. This is the highest per share price by McAfee since the dot com boom in the late 1990′s. The Board of Directors for both companies unanimously approved the decision. The stockholders and regulators still have to approve the deal.
Intel reported their largest quarterly profit in a decade during the first quarter of this year. On July 13, Intel reported operating income of $4.0 billion, net income of $2.9 billion and EPS of 51 cents per share. The company reported also reported second-quarter revenue of $10.8 billion, up 34 percent year-over-year.
“Strong demand from corporate customers for our most advanced microprocessors helped Intel achieve the best quarter in the company’s 42-year history,” said Paul Otellini.
Analysts do not expect joint products from the company until the middle of next year.