Cybersecurity Provider Avast was bought by NortonLifeLock for $8.6 bln
NortonLifeLock Inc. agreed to acquire and combine with cybersecurity firm Avast PLC in a cash-and-stock deal that would extend the U.S. company's focus on consumer software. Shareholders of Prague-based Avast will receive a combination of cash and newly issued shares of NortonLifeLock in a deal that has an equity value between $8.1 billion and $8.6 billion, the companies
"This transaction is a huge step forward for consumer Cyber Safety and will ultimately enable us to achieve our vision to protect and empower people to live their digital lives safely," said Vincent Pilette, Chief Executive Officer of NortonLifeLock. "With this combination, we can strengthen our Cyber Safety platform and make it available to more than 500 million users. We will also have the ability to further accelerate innovation to transform Cyber Safety."
Founded and based in Prague, Czech Republic, Avast is a pioneer of "freemium" software, whereby basic applications are free and subscribers pay for premium features. It had 435 million active users at the end of 2020, of whom 16.5 million were paying.
NortonLifeLock, previously known as Symantec, was renamed after it sold its enterprise business to Broadcom in 2019, leaving it focused on consumers. It has a larger premium business selling products to combat viruses, spyware, malware, and other online attacks. The combined company will have almost 5,000 workers but will cut that to around 4,000 in the two years after the deal closes, expected in nine to 12 months, he said. The companies said the deal should deliver about $280 million of annual cost savings. Avast shareholders will be entitled to receive a mix of cash and shares, with majority cash and majority stock options available, the companies said. Avast CEO Ondrej Vlcek said Avast shareholders would hold 14-26% of the combined company depending on the payment option. Based on NortonLifeLock's closing price of $27.20 on July 13, the day before market speculation started, the deal values Avast's equity between $8.1 billion and $8.6 billion.
The combined company's headquarters will be in both Prague and the U.S. city of Tempe, Arizona. Its shares will be listed on the Nasdaq in the United States, dealing a blow to stock exchanges in London and Prague.