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Intel to sell Stonesoft network security unit to Raytheon-Websense

Oct 28, 2015

Intel is selling Stonesoft, the Finnish cybersecurity company it bought two years ago for $389 million, to Raytheon-Websense, in a deal that could be announced as soon as Thursday, sources said. The unit is known for its computer firewall products.

This would seem to signify a significant realignment for Intel (intc), which started building out its security software porfolio in earnest when it paid nearly $7.7 billion for McAfee five years ago. Earlier this year it rebranded the McAfee unit as Intel Security.

Raytheon (rtn), the defense industry giant, bought Websense for $1.9 billion in April as part of its $3.5 billion bid to become a cybersecurity super power. Raytheon-Websense is now actually a joint venture 80% owned by Raytheon, the rest by Vista Equity Partners.

A Raytheon spokesman had no comment for this story and Intel reps did not respond to requests for comment. But trade publication CRN has the goods in the form of an internal memo from Raytheon-Websense CEO John McCormack outlining the acquisition plans. According to that memo, the move will add 300 employees to Raytheon staff and bolster Raytheon's Triton security platform in the hybrid cloud arena.

If this deal gets done, it takes McAfee out of networking security, where it had not been doing well, several observers said.

"Intel's move also falls in line with HP's (hpq) announced plan to sell TippingPoint to TrendMicro. "Neither of those networking portfolios were performing well and were losing ground to Palo Alto Networks (panw), Checkpoint (ckp), Dell and Fortinet (ftnt)," IDC research director Robert Westervelt told Fortune via email.

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