Security software giant Avast and popular antivirus software maker AVG have come together in a business deal that will see the former acquire the later for $1.3 billion.
Two of the biggest security software companies in the world will take part in a business purchase agreement wherein Avast will purchase all outstanding shares of AVG for $25.00 per share in a cash deal.
Both companies, based out of the Czech Republic, will see their coming together total over 400 million endpoints, out of which 160 million are mobile. These endpoints will act as de facto sensors that help provide quick information about malware, enabling Avast and AVG to quickly detect and nullify threats, purchasing firm Avast stated.
Avast plans to finance the transaction using its cash balances and the debt financing of committed third party lenders. The acquisition announcement, via a press release, also revealed that Avast had received a financing commitment of $1.685 billion from UBS Investment Bank, Jefferies and UBS Investment Bank. To fund the transaction, Avast has also already contributed equity investment to the tune of $150 million.
The management and supervisory boards of Avast unanimously approved the transaction. Over at AVG, the two boards also approved and supported the acquisition, while recommending investors accept the offer presented by Avast.
The acquisition is a part of a wider plan, the press release explained. The company is seeking to scale wider with more technological advancements in a wider market space. The acquisition comes at a time when the security company is seeking to capitalize on growth opportunities in Internet Security, a field where AVG is a household name.
Gary Kovacs, chief executive officer at AVG stated:
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.
Meanwhile, it is rumored that AVG as a brand will still remain and continue to exist in markets where it has gained a presence.
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