Intel to buy McAfee for $7.7 Billion

Re:Intel to buy McAfee for $7.7 Billion by BrandonM on Thursday August 19, 2010 @09:53AM (#1617356)

We're talking about $7.7 billion. I'm not sure it's quite as rosy a picture as you paint. I'm not that familiar with McAfee's annual profits, but even if they make $500 million a year, we can value the talent they cherry-pick at an absurdly high value of $1 billion, and it would still take Intel well over 10 years to recoup the investment, assuming stable revenue streams.

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Re:Intel to buy McAfee for $7.7 Billion by maukdaddy on Thursday August 19, 2010 @11:08AM (#1617564)

A simplified perpetuity of $175m @ 6% would have a PV of ~= 3b. I'm having trouble seeing how they'd ever break even based on profits alone. I just can't imagine what kind of integration with existing products they think will add another 4.7b.

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Re:Intel to buy McAfee for $7.7 Billion by jbooth on Thursday August 19, 2010 @02:11PM (#1618058)

6% seems a little high given the current climate, no? Take that down to 3% and you're in the neighborhood of the deal price.

Still not sure if I agree with the deal, and it does seem driven by a bunch of cash burning a hole in Intel's pocket.

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Re:Intel to buy McAfee for $7.7 Billion by reitzensteinm on Thursday August 19, 2010 @10:05AM (#1617392)

$173 million in 2009, up from $172 in 2008 and $166 in 2007. It seems odd to make an assumption when the real answer is seconds away!

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Re:Intel to buy McAfee for $7.7 Billion by BrandonM on Thursday August 19, 2010 @10:57AM (#1617525)

Thanks, I was about to head into a meeting and didn't have time to do the research. Assuming $175 million in profits per year, that means 44 years to breakeven, ignoring the talent acquisition angle. How much are 20 (or even 50) good programmers worth?

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Re:Intel to buy McAfee for $7.7 Billion by mkr-hn on Thursday August 19, 2010 @10:06AM (#1617394)

http://online.wsj.com/article/SB1000142405274870447610457543...

Intel's stock only took a small dip, and it looks like some of those who left were shifting it to McAfee to ride the wave as the stock went up.

That's a lot of investors in an otherwise volatile market not jumping ship, so they must see something good in the deal that we're missing.

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Re:Intel to buy McAfee for $7.7 Billion by jbooth on Thursday August 19, 2010 @02:13PM (#1618068)

Either that, or stock market prices are much less connected to business fundamentals than one would hope.

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Re:Intel to buy McAfee for $7.7 Billion by netman21 on Thursday August 19, 2010 @03:32PM (#1618315)

Small dip??? Intel lost $3.5 billion in market cap on the news. McAfee gained $2.6 billion.

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Re:Intel to buy McAfee for $7.7 Billion by mkr-hn on Thursday August 19, 2010 @06:44PM (#1618905)

$3.5b is a big number, but it's only 3% of their market cap.

http://www.google.com/finance?client=ob&q=NASDAQ:INTC

Several other companies in that market went down a similar amount, so it doesn't seem to be extraordinary. I would expect a lot of tech investors to move their money to McAffe after that announcement hoping to get something out of it.

What matters is what happens after now. If it continues to go down for a long time, it might be a problem.

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Re:Intel to buy McAfee for $7.7 Billion by jonknee on Thursday August 19, 2010 @10:08AM (#1617397)

They would be ecstatic with that kind of return. Without growth and still making a hefty return. McAfee has ~$2b in revenue but an operating income of "just" $221m.

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