Antivirus merger: Avast offers $1.3 billion for AVG

The merger will give Avast control of 400 million network "endpoints" running the companies' software

Antivirus vendor Avast Software has agreed to buy rival AVG Technologies for US$1.3 billion in cash.

The deal will give Avast access to over 400 million "endpoints," or devices running its and AVG's software, 160 million of them phones or tablets, the company said Tuesday.

Avast hopes the deal will make the combined company more efficient, as well as allowing it to take advantage of new growth opportunities such as securing the internet of things.

"This combination is great for our users. We will have over 250 million PC/Mac users enabling us to gather even more threat data to improve the protection to our users," Avast CEO Vincent Stickler wrote on the company blog.

The deal will also give Avast access to AVG's Zen mobile technology for controlling the protection of all a family's devices from just one of them, he said.

The combined footprint of the two companies will also mean better technical support for SMBs, he said.

AVG is perhaps best known for its free antivirus software, available for Windows PCs, Macs and Android devices, but it also sells "Pro" versions of the same software with additional features, and a number of Internet security applications for enterprises.

Revenue from all these will be between $104 million and $106 million for the quarter to June 30, it said Tuesday. That's on a par with its results over the previous four quarters. AVG will publish full results for the quarter shortly, it said.

Less than two-thirds of AVG's revenue comes from its traditional desktop security product business, and the proportion is declining. Almost one-sixth of the company's revenue comes from search advertising.

Avast is privately owned and no longer publishes its financial results.

Neither company said what would happen to their respective product ranges after the closing of the deal,which still requires approval from shareholders and regulators, but AVG CEO Gary Kovacs said it will allow the company to invest more in growing markets.

It's shake-up time in the security software market: As Avast prepares to take one company out of play, Intel may be about to put another one back in. It is said to be considering the sale of the security business it build around McAfee, which it acquired in 2011.

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Peter Sayer

IDG News Service
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