Avast Software has entered into a mutual purchase agreement with AVG Technologies. The deal will see Avast purchase all of AVG’s outstanding ordinary shares for $25 per share. The cash purchase will total approximately $1.3 billion.
The two companies are industry pioneers that were established in Czech Republic and gained international status in the 2000s. The deal will position Avast’s place as a leader in the highly competitive security industry.
The Structure of the Transaction
The transaction between AVG and Avast is a cash tender offer for AVG’s outstanding ordinary shares. The cost per share has been set at $25. Avast will finance the huge purchase using on hand cash balances and committed debt financing. This will be acquired from third party sources.
Already, Avast has received financing commitment of a whopping $1.685 billion from UBS Investment Bank, Credit Suisse Securities and Jefferies. On top of this financing, Avast has set aside $150 million for the transaction.
New and Improved Avast Software
After the deal goes through, Avast will have an incredible network of over 400 million endpoints (160 are mobile). These end points will be de facto sensors that will provide much needed information about malware. This allows the company to detect and neutralize threats effectively and timely.
The transaction will boost the operational scale of Avast allowing it to provide technically advanced privacy and personal security products. Avast CEO, Vince Steckler, said that combining the two tech companies is a great strategic move that positions Avast on top of its competitors. The company will be poised to handle the numerous requirements of an expanded IT industry.