Jim Cramer: Intel Security Unit Sale Overdue

Intel was right in finally spinning off the majority stake in its security unit, in fact it was overdue, said TheStreet's Jim Cramer.

Author:: Jim Cramer
Publish date:: Sep 8, 2016 2:10 PM EDT

Intel (INTC) - Get Report was right in finally spinning off the majority stake in its security unit, says TheStreet's Jim Cramer. TPG Capital is joining Intel as a partner in the chipmaker's cyber security unit. In exchange for a $1.1 billion equity investment, TPG will receive a 51% stake in the business, which Intel will spin off under the name McAfee. The transaction values McAfee's total equity at about $2.2 billion, and the entire company, including debt, at $4.2 billion. That's a steep discount to the $7.68 billion Intel paid for McAfee in 2010. The security business watches more than a quarter of a billion devices for large corporations, Intel says. The business posted $1.1 billion in sales in the first half of the year, an increase of 11%.

At the time of publication, Jim Cramer's charitable trust Action Alerts PLUS held no positions in stocks mentioned.