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McAfee’s Second IPO Launches At $20 A Share On Nasdaq

The cybersecurity company debuted its share price at the lower end of its expected offering, setting it at $20 a share.

McAfee made its debut on the Nasdaq today as the cybersecurity company went public again for the first time in nine years. The company’s shares opened at $20 a share.

At that price, McAfee is expected to raise about $740 million from sales of 37 million shares of common stock. McAfee will trade under the ticker symbol “MCFE.”

San Jose, Calif.-based McAfee, founded by John McAfee in 1987 and currently run by CEO Peter Leav since February, has generated $1.4 billion in revenue through June of this year compared with $1.2 billion in the same six months a year ago. In 2011, McAfee was acquired by Intel but six years later, the company split from Intel in a $4.2 billion deal with investment firm TPG Capital.

In its S-1 filing, McAfee said its IT security portfolio is well-positioned in the market, as corporations of all sizes seek to defend against ransomware syndicates.

“We have seen the number of threats from external actors targeting cloud services increase approximately 630 percent from January 2020 to April 2020,” the company said in its filing. “Enterprises have to protect themselves from increasing ransomware attacks, which has generated billions of dollars in payments to cybercriminals and inflicted significant damage and expenses for consumers, businesses and governments.”

In 2018, McAfee bought TunnelBear, a consumer VPN, which followed its purchase of Skyhigh, a cloud access security broker leader, in 2017.

McAfee wrote in its filing that its customer list includes 86 percent of the Fortune 100, 78 percent of the Fortune 500 and over 61 percent of the Global 2000, as of June 27, 2020.

“Our largest customers are typically our longest-tenured customers and purchase the most number of products from our portfolio to meet their business needs,” according to the filing.

The channel is a key part of the reach and success the company has experienced.

“We rely significantly on third-party partners to facilitate the sale of our products and solutions. We sell a significant portion of our solutions through third-party intermediaries such as affiliates, retailers, e-commerce, PC OEMs, and other distribution channel partners,” the company said in the filing.

Distributors Ingram Micro, Arrow Electronics and Tech Data contribute nearly one-quarter of its revenue, according to its S-1, with Ingram Micro’s sales delivering 15 percent, Arrow, delivering 3 percent and Tech Data delivering 5 percent for the 26-week period ended June 27.

Looking at the previous two years, Ingram Micro’s contribution to McAfee’s net revenue held steady at 15 percent in fiscal 2018 and 2019 as well, while the other two distributors’ share of net revenue contribution has dropped. Arrow Electronics accounted for 9 percent in fiscal 2018 and fell to 7 percent in fiscal 2019. Tech Data accounted for 8 percent in fiscal 2018 and fell to 6 percent in fiscal 2019.

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