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The Deal: Intel's McAfee Buys Helsinki's Stonesoft for European Expansion

NEW YORK ( TheDeal) -- McAfee Inc., the digital security unit of Intel Corp. (INTC - Get Report), issued a tender offer for Finnish network firewall design company Stonesoft Oyj worth $389 million in cash, or about $6.09 a share.

Stonesoft, based in Helsinki, has more than 6,500 customers worldwide and employs 2,200 people that McAfee would absorb. McAfee said it would combine its cloud-based security capabilities with Stonesoft's businesses in security and connectivity services. The company also provides product training courses and technical support.

"McAfee is making a significant investment in next-generation firewall technology. These solutions anticipate emerging customer needs in a continually evolving threat landscape," McAfee president Michael DeCesare said during a Monday conference call.

Stonesoft reported ¿40.1 million ($52.6 million) in net sales and ¿451,000 in operating profit for 2012, compared with ¿30.6 million in sales and a ¿1.1 million loss for the previous year. About 71.2% of sales came from European markets. The company operated 12 wholly owned subsidiaries based in Finland, the U.S., Sweden, the United Kingdom, France, Germany, Spain, Canada, Poland, Italy and Belgium at the end of 2011.

Stonesoft shares closed up ¿2.48, or 125.8%, to ¿4.45 on Monday, and were little changed on Tuesday. Intel was rising 0.8% to $24.10.

Intel bought Santa Clara, Calf.-based McAfee in August 2010 for $7.68 billion.

McAfee was active in dealmaking before Intel bought it, announcing nine transactions in the three years prior. It remained active on the M&A front even after Intel's purchase. McAfee in October 2011 agreed to purchase NitroSecurity Inc., which designs analytical tools to detect security threats, for about $160 million. That followed McAfee's March 2011 purchase of Sentrigo Inc., a startup whose technology protects databases from hackers. Intel itself bought Northern Irish cloud-based communications network and business services tech provider Aepona Group Ltd. from its venture capital and corporate backers on April 26. Terms of the deal were not disclosed, but reports in the Belfast media suggested a price of up to up to £80 million ($123.7 million). Aepona's investors included British venture firm Amadeus Capital Partners Ltd., Boston's Polaris Partners, Toronto's Relay Ventures, German software group SAP AG, French venture firm Innovacom SA, Sweden's InnovationsKapital AB and Ireland's Trinity College. McAfee and Intel didn't return calls. Stonesoft Oyj couldn't be reached.
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