In a significant business deal within the cybersecurity industry, security giant Avast has revealed its intention to acquire antivirus software firm AVG for a transaction of around $1.3 billion.
Prague-based security software firm Avast has announced a landmark acquisition which will see the company purchase fellow Czech software giant AVG, in an all-cash deal of $1.3 billion.
Avast will offer to purchase all outstanding ordinary shares of AVG for $25.00.
The deal will see both companies’ products combine their products under Avast’s banner. Avast states that the combination of users from both Avast and AVG exceeds 400 million endpoints, out of which 160 million are mobile.
These user endpoints will “act as de facto sensors”, Avast stated, adding that they will feed information of malware and other security threats as they happen, in order to combat and neutralize them at the earliest. The increased number of endpoints also helps business, with Avast scaling to create more advanced privacy and personal security products, the company noted. Speaking to TechCrunch, a spokeswoman for Avast confirmed that the AVG brand will still stay alive, with Avast opting to play to the strengths of both brands.
Avast plans on financing the all-cash deal using cash balances on hand along with committed debt financing from other third-party lenders. Notably, Avast has already received a financing commitment of $1.685 billion from Credit Suisse Securities, UBS Investment Bank and Jefferies. Furthermore, Avast contributed $150 million in equity investment to help fund the transaction.
Both the Management Board and the Supervisory Board of Avast have unanimously approved the acquisition, the press release added.
Avast chief executive Vince Steckler stated:
Combining the strengths of two great tech companies, both founded in the Czech Republic and with a common culture and mission, will put us in a great position to take advantage of the new opportunities ahead, such as security for the enormous growth in IoT.
In statements, AVG CEO Gary Kovacs said:
Our new scale will allow us to accelerate investments in growing markets and continue to focus on providing comprehensive and simple-to-use solutions for consumers and businesses, alike.
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.
The transaction is expected to close at some point between September 15 and October 15, 2016, depending on the regulatory review of the acquisition.
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