Avast Software and AVG Technologies have inked a deal that will enable the companies to offer improved protection for mobile devices and get involved in the growing Internet of Things (IoT) market.
The deal is that Avast will purchase AVG's stock at $25 per share in cash. The offered price is 33 percent taller than AVG's closing price from July 6, on the New York Stock Exchange.
The private-equity company CVC Capital Partners will assist Avast through the motions. The two companies announced the decision in a joint statement, on July 7.
The partnership will provide Avast increased opportunities to enter the internet security-related sector, boosting the operational scale and expanding the geographical reach of the company, regardless if we look at its core business or novel areas of interest, such as the IoT.
IoT is how the tech world to refer to the ever increasing network of physical devices (such as refrigerators, washing machines, thermostats, or cars) that are linked to the internet. The domain is considered to be the next big thing next to VR applications, so a lot of companies are focusing their efforts on it.
It should be mentioned that both Avast and AVG started off in the Czech Republic in the '90s.
Joining forces with AVG will give Avast more than 400 million endpoints, out of which 160 million are mobile. According to Avast, their software keeps 230 million people and enterprises safe from malware.
From AVG's side, private-equity firm TA Associates, that is also the company's largest shareholder, confirmed that will tender its shares. TA Associates holds 13 percent of AVG's stock.
Avast pleaded with Jefferies, UBS AG and Credit Suisse Securities, which will fund the deal with $1.69 billion. Avast did place $150 million in the form of equity investment.
Vince Steckler, CEO of Avast, considers that merging the strengths of the two companies will allow them to "take advantage of the new opportunities ahead, such as security for the enormous growth in IoT."
AVG's CEO Gary Kovacs, commends the upcoming teamwork that his company will be doing with Avast as main partner.
"We believe that joining forces with Avast ... fully supports our growth objectives and represents the best interests of our stockholders," Kovacs says.
Repeated reports indicate that both Avast and AVG are reliable antivirus providers. This is promising for the software solutions that the partnership will provide, and we will keep you posted on each of them when they launch.
