According to sources, the merger deal is finalised for $8.1 billion
San Francisco, NFAPost: In an SEC filing, US consumer cybersecurity firm NortonLifeLock has confirmed that it is acquiring British rival Avast specialised in digital security and privacy in order to create a global consumer security powerhouse.
The agreement, which comes just weeks after both companies confirmed they were in advanced discussions regarding a possible combination of the two brands, will see Avast stockholders receive cash and shares that value the deal at $8.1 billion to $8.6 billion.
That makes this merger the third-largest cybersecurity acquisition of all time, following Thoma Bravo‘s $12.3 billion takeover of Proofpoint and Broadcom’s $10.7 billion acquisition of Symantec’s enterprise business.
According to the filing, NortonLifeLock Inc., a Delaware corporation (the “Company”), issued an announcement (the “Rule 2.7 Announcement”) pursuant to Rule 2.7 of the UK City Code on Takeovers and Mergers (the “Code”), disclosing that the boards of directors of the Company (the “Company Board”) and Avast plc, a company incorporated in England and Wales (“Avast”) (the “Avast Board”), had reached an agreement on the terms of a recommended combination of Avast with the Company in the form of a recommended offer by Nitro Bidco Limited (“Bidco”), a company incorporated in England and Wales and a wholly-owned subsidiary of the Company, for the entire issued and to be issued ordinary share capital of Avast (the “Merger”).
NortonLifeLock, formed in 2019 as a spin-off from Symantec, says the deal will create an industry-leading consumer cyber safety business, unlock approximately $280 million of annual gross cost synergies and dramatically expand its user numbers thanks to Avast’s 435 million-strong customer base.
In a statement NortonLifeLock CEO Vincent Pilette said with this combination, the company can strengthen its cyber safety platform and make it available to more than 500 million users.
“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. We will also have the ability to further accelerate innovation to transform Cyber Safety,” said Vincent Pilette.
Besides accelerating transformation of consumer Cyber Safety with over 500 million users, Vincent Pilette said the acqisition combines Avast’s strength in privacy and NortonLifeLock’s strength in identity, creating a broad and complementary product portfolio, beyond core security and towards adjacent trust-based solutions.
“The acquisition will strengthen geographic diversification and expands into the SOHO / VSB segments, Also, brings together two strong and highly experienced consumer-focused teams,” said Vincent Pilette.
Avast, founded in 1988, focuses on cybersecurity software for consumers and small and medium-sized businesses and describes itself as one of the largest security companies. However, the company has not been without controversy during its near-25-year history; Avast was forced to shut down its marketing technology subsidiary Jumpshot last year after it was found to be peddling web browsing data that could be linked to individual users.
The Merger is conditional upon, among other things, (i) the approval of the Scheme by the Avast shareholders at the Court Meeting and the General Meeting (as such terms are defined in the Rule 2.7 Announcement), (ii) the approval by the Company’s stockholders of the issuance of Company Shares for purposes of the Merger at the Company stockholders meeting (the “Company Stockholders Meeting”), (iii) the receipt of applicable antitrust and regulatory clearances, and (iv) the sanction of the Scheme by the Court. The conditions to the Merger are set out in full in the Rule 2.7 Announcement. It is expected that, subject to the satisfaction or waiver of all relevant conditions, the Merger will be completed in mid-2022.
Once NortonLifeLock’s acquisition of the company is complete, Pilette will remain CEO of the new business, while Avast CEO Ondrej Vlcek will become president and join the board, the companies said.
Avast CEO Ondrej Vlcek said both companies talented 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,” said Avast CEO.
According to analysts, the final name of the merged company has yet to be determined, but NortonLifeLock has confirmed it will be dual headquartered in the Czech Republic and Tempe, Arizona, and will seek to cut its number of employees from 5,000 workers to around 4,000 over the next two years. The combined company will be listed on the Nasdaq, rather than Avast’s current London Stock Exchange home.
The deal, which has been confirmed just weeks after NortonLifeLock bought free antivirus provider Avira for £360 million, is expected to close in mid-2022.
Evercore is serving as financial advisor to NortonLifeLock and Kirkland & Ellis LLP and Macfarlanes LLP are serving as its legal advisors. UBS and J.P. Morgan Cazenove are serving as financial advisors to Avast and White & Case LLP is serving as its legal advisor.
