late Thursday announced a dramatic restructuring plan that includes a $275 million deal to sell its Sniffer division, the adoption of the McAfee name and a narrower focus on Internet security products and services.
The Santa Clara, Calif.-based company said it would change its name to McAfee immediately after the sale of the Sniffer product line to Silver Lake Partners and Texas Pacific Group. The deal is valued at $275 million in cash, subject to working capital adjustment and is expected to close in the third quarter.
The name change brings the company full circle after McAfee was
originally spun off as separate company and then re-acquired
as part of a deliberate move to streamline the company’s focus on
anti-spam and network security technologies. The Sniffer unit dealt mostly
with network monitoring and troubleshooting programs.
Silver Lake Partners and Texas Pacific Group plan to market
Sniffer-branded products as a stand-alone entity named Network General
Corporation. The new company will focus exclusively on network and
application performance products and will retain Sniffer’s employees and
In a statement, Network Associates said the deal will reduce earnings
this year once Sniffer group revenues are removed from the books.
“This company is engaged in the most aggressive and important
transformation in its history,” said Network Associates CEO George
Samenuk. “These changes will transform us into a more powerful, more
profitable, and more competitive company for the future.”
The company said the cost reduction plan, which has been in the works for months, will aim to hit a 25 percent operating margin by the middle of
2005. It includes a fundamental redesign of internal back office systems, a modification of product designs and Web Services changes to the reseller and distribution programs.