CVC’s Avast in $1.3bn bid for AVG

If accepted by AVG shareholders, the deal would see Avast pay $25 per share for the NYSE-listed software business, representing a 33% premium on the company's closing price on 6 July and 32% more than the six-month, volume-weighted average share price.

TA Associates, which holds 13% of AVG's share capital, has agreed to support the sale and has committed to sell its shares at Avast's bidding price.

Avast's bolt-on would bring AVG (formerly Grisoft) back under full private equity ownership, having previously been supported by Polish VC Enterprise Investors and Intel Capital.

The acquirer has secured a $1.685bn debt commitment from Credit Suisse Securities, Jefferies and UBS to finance the deal, in addition to $150m of equity from Avast.

AVG would be the first bolt-on for Avast since CVC invested in 2014.

Previous funding
Tapping its CVC European Equity Partners V, the GP acquired a major stake in Avast in a recapitalisation in February 2014, alongside existing backer Summit Partners. The transaction was supported by financing from Credit Suisse, UBS and Jefferies, and valued the company at $1bn.

Summit invested in 2010, paying $100m for a minority stake in Avast.

Enterprise acquired AVG (then Grisoft) in June 2005 alongside Intel Capital, with the two firms buying a 65% stake in a deal worth around $52m, according to unquote" data. Enterprise took a 45% stake with Intel Capital buying 20%, while the remainder stayed in the hands of private equity house Benson Oak.

In October 2009, TA paid around $200m for a minority stake in the business, resulting in a partial exit for both Intel Capital and Enterprise. The latter held a stake of 34% following the deal and reaped more than 4x its original investment through the partial sale.

AVG then listed on the NYSE in February 2012, resulting in another partial exit for Enterprise and Intel Capital. The business raised $128m, giving it a market cap of around $870m. However, shares decreased in price on the first day of trading, reaching a low of $13.45 apiece.

Company
Founded in the Czech Republic, headquartered in Amsterdam and listed on the New York Stock Exchange, AVG is a software developer focusing on security products, including anti-virus.

The company employs 1,486 people and generated $433m in sales with EBITDA of $128m in its last financial year.

People
Avast – Vince Steckler (CEO).
AVG – Gary Kovacs (CEO).

Advisers
Equity – Jefferies (M&A); White & Case (legal); De Brauw Blackstone Westbroek (legal).
Company – Morgan Stanley (corporate finance); Bridge Street Securities (corporate finance); Orrick Herrington & Sutcliffe, Peter Lamb, Ed Batts, Richard Vernon Smith, Charles Walker, Lynne Hirata, Stephanie Richards, Danny Lopez, Ajay Koduri, Wesley Helmholz, Julianne English, Jason Flaherty, Alex Okuliar, Douglas Lahnborg, Pat Zeigler, Sam Castic, Harry Clark, Greg Hume, Zach Finley, Eric Wall, Michael Robert Rodgers, Aravind Swaminathan (legal); Allen & Overy (legal).

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Expansion
• Benelux
• CEE
• Technology
• CVC Capital Partners
• TA Associates
• Enterprise Investors
• Allen & Overy
• Morgan Stanley
• Czech Republic
• Netherlands