Avast plc and NortonLifeLock Inc. have agreed on a merger that values the FTSE 100 cybersecurity group at GBP6.2bn (US$8.6bn).
The pair want to expand operations in the consumer cyber safety realm, combining Avast’s expertise in privacy and NortonLifeLock’s strength in identity.
Their customer base will be 500mln users after completion, which is expected for mid-2022, while the US$280mln cost synergies will be reinvested in innovation.
Avast shareholders will receive US$7.61 in cash for each Avast share held, plus 0.0302 of a new NortonLifeLock share. The price is a 21% premium to Avast’s closing price on 14 July, the last business day before the merger talks started.
Shareholders can also choose the option of receiving 0.1937 of a new NortonLifeLock share and US$2.37 in cash for each Avast share.
Avast’s chief executive Ondrej Vlcek will become president and will join the board, alongside founder Pavel Baudis who will be appointed independent director.
Avast has also published its interim results, where it maintained 6-8% revenue growth forecasts for the full year.
The first half of the current year lapped a period of strong comparatives from the effect of lockdowns in 2020, with downward pressure on billings as the firm transitioned from multi to single year subscriptions.
In the second half of the year, comparator period trends start to normalise and the impact of transition to single year subscriptions ends.
Plus, the increase in single year subscriptions created the benefit of an enlarged customer renewal pool, so billings are expected to grow again in the second half.
In the six months ended 30 June, billings rose 3% to US$482mln, with revenue up 9% to US$471mln and adjusted underlying earnings (EBITDA) up 12% to US$270mln.
Shareholders will receive an interim dividend of 4.8 cents per share in October.