It turns out that antivirus companies aren't quite dead yet. News has emerged on the subject of Avast Software purchasing AVG Technologies for a cool $1.3 billion. At $25 per share, AVG's value is a clear sign that there is plenty of life in the consumer security market. Priced at a 33 percent premium over the AVG closing price, the all-cash deal indicates renewed strength in the antivirus market.
AVG and Avast were both born out of the Czech Republic in the 1990s at a time that the country was still known as Czechoslovakia. Once considered unlikely players in a market dominated by giants like Symantec, Norton, and McAfee, these Czech companies have managed to leverage great products, a freemium marketing model, and resiliency into a dominant position in home-based antivirus software.
In the announcement, Vince Steckler, the CEO of Avast Software shared that “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. Combining the strengths of two great tech companies, both founded in the Czech Republic and with a common culture and mission, will put us in a great position to take advantage of the new opportunities ahead, such as security for the enormous growth in IoT.”
Wide reach and a big transition ahead
Avast will now work on transitioning AVG's intellectual and market operations. The company adds that it will leverage the acquisition to scale and reach greater technological depths. The scale of the combined company cannot be doubted as its network will now have over 400 million endpoints. Of that figure, roughly 40 percent comes from mobile devices.
The entire antivirus industry is facing deep technical challenges thanks to rising threats from botnets and the ongoing ransomware explosion. There is little doubt that there is a tremendous need for advanced system endpoint protection solutions, which represents a shift from an ongoing notion that antivirus was 'dead' and permeated the industry for years.
The shareholders of AVG will vote whether to approve the acquisition later this year.
Photo credit: Christiaan Colen