NortonLifeLock and Avast announced today that they have reached an agreement to merge the two companies. But in practice it is an acquisition and the deal is valued at between $8.1 billion and $8.6 billion: under the terms of the merger, Avast shareholders will be entitled to receive a combination of cash and newly created shares. issued from NortonLifeLock. The estimated value of the deal was based on NortonLifeLock’s closing stock price of $27.20 on July 13, 2021. This was the last trading day for NortonLifeLock shares before market speculation began regarding to merger.
NortonLifeLock and Avast’s boards believe the merger has a compelling strategic and financial rationale and represents an attractive opportunity to create an industry-leading new cybersecurity business by leveraging both groups’ brands, technology and innovation to offer substantial benefits to consumers, shareholders and other stakeholders.
“This transaction is a major step forward in consumer cybersecurity and will enable us to achieve our vision of protecting and empowering people to live their digital lives securely,” said Vincent Pilette, CEO of NortonLifeLock. “With this combination, we can strengthen our cybersecurity platform and make it available to more than 500 million users. We will also have the ability to further accelerate innovation to transform cybersecurity.”
“At a time when global cyber threats are growing but cybersecurity penetration remains very low, together with NortonLifeLock, we will be able to accelerate our shared vision of providing holistic cyber protection to consumers around the world,” said Ondřej Vlček, CEO of Avast. “Our talented teams will have better opportunities to innovate and develop improved solutions and services. Through our well-established brands, greater geographic diversification and access to a larger global user base, the combined businesses will be positioned to access the significant growth opportunity that exists around the world.”
Strategic and Financial Benefits
- Accelerates the transformation consumer cybersecurity with more than 500 million users;
- It combines Avast’s strength in privacy and NortonLifeLock’s strength in identity, creating a broad and complementary product portfolio , beyond core security and toward adjacent trust-based solutions;
- Strengthens geographic diversification and facilitates expansion in SOHO / VSB segments;
- unlocks the significant value creation through approximately $280 million of annual gross cost synergies, with the potential to appreciation additional reinvestment capacity for innovation and growth;
- Brings together two management teams consumer focused strong and highly experienced.
The merger will also enhance the combined company’s financial profile through greater scale, long-term growth, cost synergies with reinvestment capability and strong cash flow generation supported by a resilient balance sheet, and is expected to lead to a double-digit EPS growth within the first full year after completion of the merger and long-term double-digit revenue growth.
Upon completion of the transaction, NortonLifeLock CEO Vincent Pilette will remain CEO; NortonLifeLock CFO Natalie Derse will remain CFO; and Avast CEO Ondřej Vlček is expected to join NortonLifeLock as president and become a member of the Board of Directors of NortonLifeLock. In addition, Pavel Baudiš, co-founder and current director of Avast, is expected to join the NortonLifeLock Board as an independent director.
Upon completion of the merger, the combined company will have two headquarters in Prague, Czech Republic, and Tempe, Arizona, USA, and will have a significant presence in the Czech Republic. The company will be listed on NASDAQ.