UK-based cybersecurity firm Avast in merger talks with rival NortonLifeLock

By Amirtha P S, Desk Reporter
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UK-based cybersecurity firm Avast is in advanced discussions with its rival US-headquartered NortonLifeLock about a merger that would create a clear leader in consumer security software.

Last day, both companies confirmed the talks, with Avast saying an offer would be in cash and shares, although it added there was no certainty a deal will be agreed.

Avast, which was founded and based in Prague, Czech Republic, is a pioneer of “freemium” software, whereby basic applications are free and subscribers pay for premium features. Its Avast and AVG branded desktop and mobile software had more than 435 million active users at the end of 2020, of which 16.5 million are paying. It has a market capitalization of $7.21 billion, according to Refinitiv data.  

The shift to home working during COVID-19 spurred demand for its desktop products like antivirus software, and it recorded 7.1 percent organic growth in adjusted billings to $922 million last year.

Shares in Avast, which was listed in London in 2018, were trading up 13 percent, giving the company a market capitalization of $8.11 billion, according to Refinitiv data. The company’s founders, Mr. Pavel Baudis and Mr. Eduard Kucera own a combined 35 percent.

Reports suggest that a deal could value Avast at more than $8 billion. Analysts at Berenberg, however, said, “nothing short of a $10 billion valuation is fair to Avast’s shareholders.”

Arizona-based NortonLifeLock, which primarily deals with consumer cyber safety, said a deal would bring together “two companies with aligned visions.”

NortonLifeLock was previously known as Symantec Corp before it sold its enterprise-security business to Broadcom in 2019. It currently sells Norton antivirus software and LifeLock identity-theft-protection products for home and works use.

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