Avast Strikes Deal To Acquire AVG For $1.3B

Security technology developer Avast Software will acquire AVG Technologies, a developer of security applications for PCs and mobile devices, for $1.3 billion, the companies announced Thursday.

Avast is itself a leading developer of PC and mobile device security software. The company said it's acquiring Amsterdam-based AVG "to gain scale, technological depth and geographical breadth" and allow it to "be in a position to take advantage of emerging growth opportunities in Internet security," as well as organizational efficiencies, according to a company statement.

"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," Avast CEO Vince Steckler said in the statement. The combination of the two companies would also position Avast to take advantage of new opportunities such as providing security software for the Internet of Things networks.

[Related: AVG Business Continues Push Toward Partner-Led Model With New Distribution Initiative]

Privately held Avast is paying $25 per share in an all-cash offer for AVG's outstanding shares, a 33 percent premium over their Wednesday closing price and a 3 percent premium over the average volume-weighted price-per-share over the last six months, the company said. The deal is subject to approval by AVG shareholders.

Avast, based in Redwood City, Calif., expects to complete the deal between Sept. 15 and Oct. 15, depending on the timing of regulatory reviews.

Both Avast and AVG were founded in the Czech Republic, Avast in the late 1980s and AVG in the early 1990s. AVG markets a line of consumer Internet security, performance optimization, and privacy and identity protection products for desktop and mobile devices, as well as the AVG Business portfolio of cloud security and remote monitoring and management software for small and mid-size businesses. The business-focused software is sold through a global partner network.

Combined, the customer bases of the two companies will include 400 million endpoints, of which 160 are mobile, and all of which act as de facto sensors that provide information about malware threats. Avast said that increase will enable it to "create more technically advanced personal security and privacy products."