Avast Software to Acquire AVG Technologies for $1.3 Billion

Shares of AVG Technologies NV (NYSE: AVG) jumped up 31.51% to $24.71 on Thursday. The reason is that security software provider Avast Software and AVG Technologies both announced they have made an agreement in which Avast will purchase all of the outstanding ordinary shares of AVG for $25.00 per share in cash. The amount capital of this acquisition is around $1.3Billion. Avast’s bid price represents a 33% premium compared with the closing price of AVG Technologies on Wednesday.

Avast said they will finance the acquisition with internal resources and debt financing from third-party lenders. The company has received a financing commitment of $1.69 billion from Jefferies, UBS Investment Bank and Credit Suisse Securities, and has contributed $150 million in equity investment to finance the acquisition.

“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, chief executive officer of Avast Software. “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.”

“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, chief executive officer, AVG. “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.”

Avast has more than 230 million users worldwide. The company offers free and paid software for personal computers and mobile devices to individuals and businesses. This acquisition will combine users from Avast’s and AVG’s. The new company will have a network of over 400 million endpoints which providing information about malware to help detect and neutralize new threats as soon as they appear.

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