McAfee acquires cloud security startup Skyhigh Networks, which was last valued at $400M, amid ongoing consolidation in the security industry
After spinning out as a standalone security business from Intel earlier this year, McAfee has made its first acquisition.
Context & Ripple Effects
McAfee is barely eight months into life as a standalone company — the spinout from Intel left TPG with 51% and Intel with 49% at a $4.2B valuation — and it has wasted no time putting capital to work. Skyhigh Networks, last valued at $400M, gives the newly independent vendor a cloud security franchise rather than an endpoint one.
The deal is also the opening move of a longer ownership arc: McAfee would go on to sell its enterprise business to Symphony Technology Group for $4B in 2021, before Advent International took the whole company private at $14B. This first acquisition under TPG set the template of a PE-owned security consolidator buying capability.
First-order effects
- Skyhigh's cloud access security technology folds into McAfee's portfolio, giving the TPG-controlled company its first expansion beyond the inherited Intel Security product line.
- Skyhigh's backers exit at roughly double the startup's last private valuation, while McAfee signals to the market that the standalone entity is built to acquire, not just operate.
Second-order effects
- Rival security vendors face pressure to match the move by buying their own cloud security specialists rather than building, tightening supply of independent CASB startups and lifting their price tags.
- The acquisition validates the PE playbook for security assets: buy a brand, bolt on capability, and restructure — the path that led to the $4B sale of McAfee's enterprise business four years later.
Third-order effects
- If the pattern holds, security consolidation runs through financial sponsors rather than strategic chip-and-PC owners like Intel, which had already concluded that a $7.7B security acquisition no longer fit its core business.
- Independent security startups become acquisition currency in a roll-up cycle, with ownership migrating from corporate parents to private equity firms willing to trade whole companies — as Advent's $14B take-private later confirmed.
The trend: The security industry is consolidating through private-equity-owned platforms that buy capability startups, replacing the era when diversified hardware giants like Intel held security assets.