Security software firm Avast to buy AVG Technologies for $1.3 bn
07 July 2016
Avast, backed by private-equity firm CVC Capital Partners, has offered to pay $25 per share, a premium of 33 per cent over AVG's yesterday closing price.
Private-equity firm TA Associates, AVG's biggest shareholder with a 13-per cent stake, has agreed to tender its shares to the transaction.
Avast, based in Prague, expects to fund the acquisition using cash on hand and debt financing.
Credit Suisse Group AG, Jefferies and UBS AG will provide $1.69 billion in financing, while Avast has contributed $150 million in equity investment.
Both companies are industry pioneers founded in the Czech Republic in the late 1980s and early 1990s, and later expanded internationally in the 2000s.
Initially known as Grisoft, AVG has grown to become one of the biggest brands in desktop and mobile security apps.
It was founded in 1991 and listed in 2012; the Amsterdam-based company has grown through acquisitions, including the 2006 purchase of Ewido Networks, Exploit Prevention Labs in 2007 and Sana Security in 2009.
It also acquired mobile-security firm Location Labs in 2014 and Norwegian software maker Norman Safeground.
Founded out of Prague in 1988, Avast has now become one of the largest online security companies, and control more than a fifth of the global antivirus software market.
Avast said that it is pursuing this acquisition to gain scale, technological depth and geographical breadth and serve customers with more advanced security offerings in the core business and new innovations in emerging markets, such as security for IoT devices.
Combining Avast's and AVG's users, the company will have a network of more than 400 million endpoints, of which 160 million are mobile.
"We are in a rapidly changing industry, and this acquisition gives us the breadth and technological depth to be the security provider of choice for our current and future customers," said Vince Steckler, CEO of Avast Software.
"We believe that joining forces with Avast, a private company with significant resources, fully supports our growth objectives and represents the best interests of our stockholders," said Gary Kovacs, CEO, AVG.
"As the definition of online security continues to shift from being device-centric, to being concerned with devices, data and people, we believe the combined company, with the strengthened value proposition, will emerge as a leader in this growing market," he added.