Norton to acquire Avast for $8.6 bn

NortonLifeLock Inc agreed to buy Avast Plc in a deal valued at as much as $8.6 billion, giving the US cybersecurity company access to one of the biggest customer bases in the industry.

Avast stockholders will receive cash and shares that value the deal at $8.1 billion to $8.6 billion, the companies said on Tuesday in a statement. Once the merger is completed, NortonLifeLock chief executive officer Vincent Pilette will remain CEO and the company will have dual headquarters in Tempe, Arizona, and Prague. Avast CEO Ondrej Vlcek will become president and join the board, the companies said.

High-profile ransomware attacks on large companies and infrastructure providers have increased demand for software to guard against hackers. That, coupled with more people working remotely, will continue to boost growth of cloudbased security providers, Bloomberg Intelligence analyst Mandeep Singh has said.

The deal will dramatically expand user numbers for NortonLifeLock, which was known as Symantec Corp before it sold its enterprise-security business to Broadcom Inc in 2019 for $10.7 billion. Prague-based Avast has 435 million "freemium" subscribers. It attracts customers to a free, baseline product and tries to turn them into paying users with more advanced software.

"With this combination, we can strengthen our Cyber Safety platform and make it available to more than 500 million users," Pilette said in the statement.

Avast said at the beginning of the year that plans to transition its customer base to one-year subscriptions would hurt billings growth in the first half, while its adjusted earnings margin would be held back by higher costs to move to the cloud.