Intel is selling off a majority stake in its McAfee unit and turning it back into an independent security company.
Intel made the deal with investment firm TPG, which will own a 51 percent stake in the new McAfee company. Intel will own the remainder.
As part of the deal, Intel is receiving $3.1 billion in cash. It originally bought McAfee back in 2011 for $7.7 billion -- a deal that caused some industry watchers to scratch their heads.
Intel is best known as a chipmaker, but at the time it was also hoping to improve security around its products. PC security was a major concern back then, said Nathan Brookwood, principal analyst at Insight 64. But now cyberthreats are moving to target the cloud and servers.
"McAfee had relatively little to do in cloud security. While Intel didn't lose a lot of money, it never was a huge win," he said.
In 2014, the chipmaker rebranded its McAfee business as Intel Security. However, reports about a possible McAfee sale circulated earlier this year as Intel worked to restructure its business amid lagging PC sales. In April, the company announced it would cut 12,000 jobs.
On Wednesday, Intel said the new McAfee will be one of the largest “pure-play” cybersecurity companies in the world. The new company will be valued at $4.2 billion.
In addition, TPG is making a $1.1 billion equity investment in its new McAfee property to drive growth.
Intel will continue partnering with the McAfee unit on security. Chris Young, the general manager for Intel Security, will be head of the new company.
In a letter to stakeholders, Young said the company is still committed to delivering on its product roadmap, but that it can execute its plans even faster.
"Our customers want the reassurance that our strategy has not changed. It hasn’t," he added.
The deal is expected to close in next year’s second quarter.
Agam Shah contributed to this report.