HCL-owned US-based NortonLifeLock is a company that provides security, storage, and systems management solutions to help consumers secure their devices, identities and online privacy of approx 50 million consumers.
In a recent development, NortonLifeLock and Czech Republic-based digital security and privacy software company, Avast, announced that they have both reached an agreement for a merger. The development was a recommended offer by NortonLifeLock, for the entire issued and to be issued ordinary share capital of Avast.
Under the terms of the merger, Avast investors will receive a combination of cash consideration as well as newly issued shares in NortonLifeLock. And according to a statement from NortonLifeLock, the merger will put Avast’s valuation in between approx $8.1B (approx €6.9B) and $8.6B (approx €7.32B), depending on Avast shareholders’ elections.
With this merger, NortonLifeLock’s CEO, Vincent Pilette, will remain CEO, NortonLifeLock’s CFO, Natalie Derse, will remain CFO, and Avast’s CEO, Ondřej Vlček, is expected to join NortonLifeLock as President and become a member of the NortonLifeLock Board of Directors.
In addition, Pavel Baudiš, a co-founder and current director of Avast, is expected to join the NortonLifeLock Board as an independent director.
Besides, the combined company will be dual headquartered in Prague (Czech Republic) and Tempe, Arizona (US), and will have a significant presence in the Czech Republic. The combined company will be listed on NASDAQ.
“Antivirus is your first step to online freedom”
Founded in 1988, Avast is a security company that uses next-gen technologies to fight cyber attacks in real time. It protects people from threats on the internet and the evolving IoT threat landscape, by providing digital security products to its clients under the Avast and AVG brands.
The company claims that its threat detection network is among the most advanced in the world, and uses machine learning and artificial intelligence technologies to detect and stop threats in real time.
Avast digital security products for mobile, PC, or Mac are certified by VB100, AV-Comparatives, AV-Test, OPSWAT, ICSA Labs, West Coast Labs, and others. The company claims to protect over 435 million people online, and is backed by global private equity firms CVC Capital Partners and Summit Partners.
Merger’s strategic and financial benefits
Speaking about the merger, Ondřej Vlček, CEO of Avast, says, “At a time when global cyber threats are growing, yet cyber safety penetration remains very low. Together with NortonLifeLock, we will be able to accelerate our shared vision of providing holistic cyber protection for consumers around the globe.”
According to board members of NortonLifeLock and Avast, they believe the merger has strategic and financial rationale. It will help them create a new, consumer Cyber Safety business by leveraging the established brands, technology, and innovation of both groups as well as deliver benefits to consumers, shareholders, and other stakeholders.
Vlček further adds, “Our teams will have better opportunities to innovate and develop enhanced solutions and services, with improved capabilities from access to superior data insights. Through our well-established brands, greater geographic diversification and access to a larger global user base, the combined businesses will be poised to access the significant growth opportunity that exists worldwide.”
In a statement, NortonLifeLock CEO Vincent Pilette mentioned that the merger will help them strengthen its Cyber Safety platform as well as make it available to more than 500 million users. Moreover, Pilette believes this will also further accelerate innovation to transform Cyber Safety.
In terms of financial benefit, the development is expected to drive double-digit EPS accretion within the first full year following completion of the merger and double-digit revenue growth in the long-term.