Two Security Pioneers Unite to Strengthen their Global
Leadership in Internet Security
Redwood City, California / Amsterdam, The
Netherlands, July 7, 2016 – Avast Software, an industry-leading maker of the most trusted
security software in the world, and AVG Technologies N.V., (NYSE: AVG), a developer
of business, mobile and PC device security software applications, today
announced that they have entered into a purchase agreement in which Avast will offer
to purchase all of the outstanding ordinary shares of AVG for $25.00 per share
in cash, for a total consideration of approximately $1.3B. Both companies are
industry pioneers founded in the Czech Republic in the late 1980s and early 1990s,
that expanded internationally in the 2000s, and now will be combining
complementary strengths to position Avast for continued growth in the security
industry.
Avast is pursuing this acquisition to gain
scale, technological depth and geographical breadth so that the new organization
can be in a position to take advantage of emerging growth opportunities in
Internet Security as well as organizational efficiencies. The technological
depth and geographical reach will help Avast serve customers with more advanced
security offerings in the core business and new innovations in emerging markets,
such as security for IoT devices.
Combining Avast’s and AVG’s users, the
organization will have a network of more than 400 million endpoints, of which
160 million are mobile, that act as de facto sensors, providing information
about malware to help detect and neutralize new threats as soon as they appear.
This increase in scale will enable Avast to create more technically advanced
personal security and privacy products.
This transaction has been unanimously approved
by the Management Board and Supervisory Board of Avast. The Management Board
and Supervisory Board of AVG approved and support the transaction and recommend
the offer for acceptance to the AVG shareholders.
“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,” said Vince Steckler,
chief executive officer of Avast Software. “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.”
“We believe that joining forces with Avast, a
private company with significant resources, fully supports our growth
objectives and represents the best interests of our stockholders,” said Gary
Kovacs, chief executive officer, AVG. “Our new scale will allow us to
accelerate investments in growing markets and continue to focus on providing
comprehensive and simple-to-use solutions for consumers and businesses, alike. As
the definition of online security continues to shift from being device-centric,
to being concerned with devices, data and people, we believe the combined
company, with the strengthened value proposition, will emerge as a leader in
this growing market.”
The Transaction
The transaction
is structured as an all-cash tender offer for all outstanding ordinary shares
of AVG at a price of $25.00 per share in cash. Avast plans to finance the transaction using
cash balances on hand and committed debt financing from third party lenders. Avast has received a financing commitment of
$1.685 billion from Credit Suisse Securities, Jefferies and UBS Investment Bank.
In addition, Avast has contributed $150
million in equity investment to fund the transaction. The
proposed transaction is not subject to a financing condition.
The offer price represents a 33% premium over
the July 6, 2016 closing price and a premium of 32% over the average volume
weighted price per share over the past six months. The contemplated tender offer will be subject to certain
shareholder approvals, the receipt of regulatory clearances, the tender of at
least 95% of the outstanding ordinary shares of AVG or, if AVG shareholders
approve the asset sale contemplated in the purchase agreement, the tender of at
least 80% of the outstanding ordinary shares of AVG, and other customary
closing conditions. Additionally,
certain shareholders including funds affiliated with TA Associates, who hold
approximately 13% of the issued and outstanding shares of AVG, respectively, have committed to support
the transaction and tender their shares in the offer.
If at least 95%
of the outstanding ordinary shares of AVG are acquired in the contemplated
tender offer, Avast expects to acquire the ordinary shares of AVG that were not
tendered into the tender offer through the compulsory share acquisition process
under Section 2:92a/2:201a of the Dutch Civil Code. If AVG’s shareholders
appove the asset sale contemplated in the purchase agreement at the
extraordinary general meeting of shareholders to be convened shortly by AVG and
the tender offer is successfully completed with Avast acquiring less than 95%
but at least 80% of the outstanding ordinary shares of AVG, then Avast plans to
effect an asset sale pursuant to which Avast will acquire substantially all of
the assets, and assume substantially all of the liabilities, of AVG promptly
following the tender offer. Following the completion of the asset sale, AVG
will be liquidated and the remaining minority shareholders of AVG will receive
cash distributions with respect to each ordinary share owned by them equal to
the per share cash consideration paid in the tender offer less any applicable
dividend withholding tax or any other taxes. The offer will be described in
more detail in a tender offer statement on Schedule TO to be filed by Avast and
a solicitation/recommendation statement on Schedule 14D-9 to be filed by AVG.
The transaction is expected to close sometime between September 15, and October
15, 2016, depending on the timing of regulatory review.
Advisors
Jefferies International Limited is acting as
exclusive financial advisor, and White & Case LLP and De Brauw Blackstone
Westbroek N.V. are acting as legal advisors, to Avast. Morgan Stanley & Co.
LLC is acting as financial advisor to AVG and Bridge Street Securities, LLC is
acting as independent financial advisor to the supervisory board of AVG.
Orrick, Herrington & Sutcliffe LLP and Allen & Overy LLP are acting as
legal advisors to AVG.
About Avast
Avast Software (www.avast.com), maker of the most trusted mobile and PC
security in the world, protects 230 million people and businesses with its
security applications. In business for over 25 years, Avast is one of the early
innovators in the security business, with a portfolio that includes security
and privacy products for PC, Mac, Android and iOS, and premium suites and
services for business. In addition to being top-ranked by consumers on popular
download portals worldwide, Avast is certified by, among others, VB100,
AV-Comparatives, AV-Test, OPSWAT, ICSA Labs, and West Coast Labs. Avast is backed by leading global private equity firms CVC Capital Partners and Summit Partners.
About AVG (NYSE: AVG)
AVG is a leading provider
of software services to secure devices, data and people. AVG’s award-winning
consumer portfolio includes internet security, performance optimization,
location services, data controls and insights, and privacy and identity
protection, for mobile devices and desktops. The award-winning AVG Business
portfolio, delivered through a global partner network, provides cloud security
and remote monitoring and management (RMM) solutions that protect small and
medium businesses around the world. For more information visit www.avg.com.
Forward-Looking Statements
This communication contains forward-looking
information that involves substantial risks and uncertainties that could cause
actual results to differ materially from those expressed or implied by such
statements. All statements other than statements of historical fact are, or may
be deemed to be, forward-looking statements within the meaning of the federal
securities laws, and involve a number of risks and uncertainties. In some
cases, forward-looking statements can be identified by the use of forward-looking
terms such as “anticipate,” “estimate,” “believe,” “continue,” “could,”
“intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,”
“are confident that,” “objective,” “projection,” “forecast,” “goal,”
“guidance,” “outlook,” “effort,” “target,” “would” or the negative of these
terms or other comparable terms. There are a number of important factors that
could cause actual events to differ materially from those suggested or
indicated by such forward-looking statements and you should not place undue
reliance on any such forward-looking statements. These factors include risks
and uncertainties related to, among other things: general economic conditions
and conditions affecting the industries in which Avast and AVG operate; the
uncertainty of regulatory approvals; the parties' ability to satisfy the
conditions to the contemplated tender offer and consummate the transactions
described in this communication; and AVG's performance and maintenance of
important business relationships. Additional information regarding the factors
that may cause actual results to differ materially from these forward-looking
statements is available in AVG's SEC filings, including AVG's Annual Report on
Form 20-F for the year ended December 31, 2015. These forward-looking statements
speak only as of the date of this release and neither Avast nor AVG assumes any
obligation to update or revise any forward-looking statement, whether as a
result of new information, future events and developments or otherwise, except
as required by law.
Additional Information and Where to Find It
The
tender offer referenced in this communication has not yet commenced. This
communication is for informational purposes only and is neither an offer to
purchase nor a solicitation of an offer to sell any ordinary shares of AVG or any other securities, nor is
it a substitute for the tender offer materials that Avast will file with the
SEC. The solicitation and offer to purchase ordinary shares of AVG will only be made pursuant to an
Offer to Purchase, a related letter of transmittal and certain other tender
offer documents. At the time the tender offer is commenced, Avast will file a
tender offer statement on Schedule TO, including an Offer to Purchase, a
related letter of transmittal and certain other tender offer documents, and AVG will file a
Solicitation/Recommendation Statement on Schedule 14D-9, with the SEC, each
with respect to the tender offer. The
tender offer statement (including the Offer to Purchase, the related Letter of
Transmittal and certain other tender offer documents) and the solicitation/
recommendation statement will contain important information. AVG’s shareholders are urged to read
the tender offer statement and Solicitation/Recommendation Statement, as they
may be amended from time to time, as well as any other relevant documents filed
with the SEC, when they become available, carefully and in their entirety
because they will contain important information that holders of AVG’s securities should consider
before making any decision regarding tendering their securities. The Offer
to Purchase, the related Letter of Transmittal and certain other tender offer
documents, as well as the Solicitation/Recommendation Statement, will be made
available to all holders of ordinary shares of AVG at no expense to them. The tender offer materials and the
Solicitation/Recommendation Statement will be made available for free at the
SEC’s website at www.sec.gov. Copies of the documents filed with
the SEC by AVG will be
available free of charge on AVG’s
website at investors.avg.com. In addition to the Offer to Purchase, the
related Letter of Transmittal and certain other tender offer documents, as well
as the Solicitation/Recommendation Statement, AVG files annual, quarterly and current reports and other information
with the SEC. You may read and copy any reports or other information filed by AVG at the SEC public reference room
at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. AVG’s filings with the SEC are also
available to the public from commercial document-retrieval services and at the
website maintained by the SEC at www.sec.gov.
