NEW YORK (The Deal) -- CVC Capital Partners said Wednesday it will make a "major" investment in Avast Software through a deal which assigns an enterprise value of $1 billion to the antivirus specialist.
The London buyout firm will joint Summit Partners and Avast founders Eduard Kucera and Pavel Baudia as a shareholder, buying existing stock in the company.
A source said the investment gives CVC a significant minority holding. The buyout firm wants to increase Avast's penetration in English-speaking markets and offer more products to its 200 million users. Avast's products include security, privacy and identity-protection software as well as the GrimeFight "optimization" product to help PCs run more efficiently.
Prague-based Avast has operations in Redwood City, Calif. Founded in 1988, the company operates a "freemium" pricing strategy, whereby basic services are provided for free to lure in customers. Summit Partners invested in the company in 2010, paying $100 million for a minority stake.CVC's telecom, media and technology head Lorne Somerville and TMT Managing Director Siddharth Patel oversaw the investment for the British firm. In a statement they said they "firmly believe in its ability to offer more and more to its 200 million users, driven by the philosophy that its free products should be better than the paid products offered by others." Other software companies in CVC's portfolio include business process outsourcing company SPi Global Holdings, of the Philippines, and Dutch human resources and payrolls systems maker Raet. CVC declined to disclose deal terms, and Summit representatives couldn't immediately be reached for comment. A recent Wall Street Journal report suggested the Boston firm and at least one of the founders were planning to sell part of their holdings to CVC. Jefferies International advised CVC, whose legal advice came from Clifford Chance. Credit Suisse Group, UBS (UBS) and Jefferies have committed debt funding for the acquisition, including facilities for potential bolt-on purchases. White & Case advised on the financing for both CVC and Avast and provided Avast's legal advice.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV