Avast Moves to Acquire AVG Tech

By Chris Lange Updated Jan 13, 6:00AM EST · Published Jul 7, 9:50AM EDT

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Avast Moves to Acquire AVG Tech — © Thinkstock

AVG Technologies N.V. (NYSE: AVG) shares soared early on Thursday following news of an acquisition. The company entered into a purchase agreement with Avast Software under which all of its outstanding shares will be acquired in a tender offer for $25 per share in cash. The transaction represents a total consideration of roughly $1.3 billion.

The transaction was approved by both boards of directors, although it is still subject to shareholder and regulatory approval. It is expected to close in September or October of this year.

The offering price represents a 33% premium from the July 6 closing price and a premium of 32% over the average volume weighted price per share over the past six months.

The motivation behind this acquisition is for Avast to gain scale, technological depth and geographical breadth so that the new organization can be in a position to take advantage of emerging growth opportunities in internet security as well as organizational efficiencies. The technological depth and geographical reach will help Avast serve customers with more advanced security offerings in the core business and new innovations in emerging markets, such as security for Internet of Things devices.

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By combining Avast’s and AVG’s users, the organization will have a network of over 400 million endpoints, of which 160 million are mobile, that act as de facto sensors, providing information about malware to help detect and neutralize new threats as soon as they appear.

Gary Kovacs, CEO of AVG, commented:

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. 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.

Shares of AVG closed Wednesday at $18.79 were up over 31% at $24.77 early Thursday. The consensus analyst price target was $27.86 and the 52-week trading range is $16.12 to $29.15.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.