Skip to main content

NortonLifeLock Agrees to Buy Cybersecurity Firm Avast

NortonLifeLock agrees to acquire cybersecurity firm Avast for cash and stock in a deal valued at between $8.1 billion and $8.6 billion.

NortonLifeLock  (NLOK) - Get NortonLifeLock Inc. Report has agreed to acquire cybersecurity firm Avast for cash and stock in a deal valued at between $8.1 billion and $8.6 billion.

Under terms of the merger, Avast's shareholders would receive a combination of cash consideration and newly issued shares in the Tempe, Ariz.-based consumer cyber safety company.

Based on NortonLifeLock's closing share price of $27.20 on July 13, the merger values the transaction at between $8.1 billion and $8.6 billion, depending on Prague-based Avast's shareholder elections, according to a Tuesday statement from the companies.

"This transaction is a huge step forward for consumer cyber safety and will ultimately enable us to achieve our vision to protect and empower people to live their digital lives safely," said NortonLifeLock CEO Vincent Pilette.

"With this combination, we can strengthen our cyber safety platform and make it more available to more than 500 million users. We will also have the ability to further accelerate innovation to transform cyber safety," Pilette said.

Avast CEO Ondrej Vlcek agreed with Pilette's comments.

TheStreet Recommends

"At a time when global cyber threats are growing, yet cyber safety penetration remains very low, together with NortonLifeLock, we will be able to accelerate our shared vision of providing holistic cyber protection for consumers around the globe," Vlcek said.

The merger is expected to enhance the financial profile of the combined company through increased scale, long-term growth, cost synergies with reinvestment capacity and strong cash flow generation supported by a resilient balance sheet, and also is expected to drive double-digit EPS accretion within the first full year following completion of the transaction and double-digit growth in the long term, the statement asserted.

Following completion of the merger, Pilette is expected to remain CEO of the company, and Vlcek will join NortonLifeLock as president and member of the board of directors.

Evercore is serving as financial adviser to NortonLifeLock, and Kirkland & Ellis and Macfarlanes are serving as legal advisers. UBS and J.P. Morgan Cazenova are Avast's financial advisers, and White & Case is its legal adviser.

NortonLifeLock's shares on Tuesday rose 5.18% to $25.40 in after-hours trading.

NortonLifeLock is a holding in Jim Cramer's Action Alerts PLUS member club