Avast Antivirus plans to buy AVG

Avast and AVG join forces. Industry players expect more deals, as larger cybersecurity players with established revenue streams look to build out their product lines to take on a new generation of cyberthreats by acquiring other information security companies. The latest of these is security software company Avast Software announcing it plans to buy Dutch rival AVG Technologies (AVG.N) for $1.3 billion in cash to expand its presence in emerging markets.

Avast said it will pay $25 per AVG share, representing a 33 percent premium to AVG stock’s closing price on Wednesday.

Vincent Steckler, Avast’s CEO, says his company intends to forward a tender offer to AVG to buy all the firm’s stock for the price of $25 per share and a total sum of $1.3 billion. Steckler says in a blog post today that AVG’s Board of Directors is giving the go-ahead for this transaction and will be recommending shareholders to vote to accept the offer.

If the AVG vote goes as planned, the acquisition will then go through the governmental regulatory procedures, and AVG will become part of Avast. Avast, which provides free and paid software for personal computers and mobile devices to businesses and individuals, has more than 230 million users worldwide.

The company plans to fund the transaction using cash on hand and debt financing. Avast has received financing commitment of $1.685 billion from Credit Suisse Securities, Jefferies and UBS Investment Bank, it said.

Companies are spending more for computer security, following a series of data breaches in recent years. Research firm Gartner Inc. expects world-wide security spending to increase almost 10% this year, to $91.6 billion.

Symantec’s Blue Coat acquisition gave the antivirus company new cloud-computing capabilities, as did Cisco Systems Inc.’s 2015 acquisition of OpenDNS, valued at $635 million. Last month, the Financial Times reported that Intel Corp. is considering the sale of its Intel Security business, which produces McAfee antivirus software. Intel declined to comment on Thursday.

Max Francisco has been doing digital projects in Brazil and the US for the last 15 years.