Avast Software, a leading antivirus cyber software company, has entered into a purchase agreement with AVG Technologies N.V. [AVG] worth about $1.3 billion, the companies saidThursday.
Under the agreement, Avast will offer to purchase all of the outstanding ordinary shares of AVG for $25 per share in cash. Avast plans to finance the transactions using cash balances on hand and committed debt financing from third party lenders. Avast has also received a financing commitment of $1.685 billion from Credit Suisse Securities, Jefferies [JEF], and UBS Investment Bank [UBS].
Avast also contributed $150 million in equity investment to fund this transaction, which is not subject to financing condition, Avast said.
The offer price is a 33 percent premium over the July 6 closing price and a premium 32 percent over the average weighted price per share over the previous six months, the company noted.
This tender offer will be subject to certain shareholder approvals, the receipt of regulatory clearances, the tender of at least 95 percent of outstanding ordinary shares of AVG (or the tender of at least 80 percent if AVG shareholders approve the asset sale in the purchase agreement), and other customary closing conditions.
Following the completion of the asset sale, AVG is set to be liquidated and any remaining minority shareholders will receive cash distributions with respect to each ordinary share owned equal to the per share cash considering paid in the tender offer.
Avast explained this acquisition is meant to gain scale, technological depth, and geographical breadth to a combined company can take advantage of growth opportunities in internet security and 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 IoT (Internet of Things) devices, Avast said in a statement.
The transaction was unanimously approved by Avast’s management and supervisory board while AVG’s boards approved and supported the transaction. AVG’s boards recommended the offer for acceptance to the AVG shareholders.
“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,” Vince Steckler, CEO of Avast Software, said in a statement.
“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,” Gary Kovacs, CEO of AVG, added.
The final transaction is expected to close between Sept. 15 and Oct. 15 later this year, depending on regulatory review timing.