NortonLifeLock Plans To Buy Avira For $360M To Expand In Europe
NortonLifeLock’s proposed acquisition comes just eight months after Investcorp bought consumer cybersecurity and privacy vendor Avira for $180 million, meaning Avira’s valuation has doubled over 2020.
NortonLifeLock has agreed to purchase Avira from Investcorp for $360 million to strengthen its consumer cybersecurity and privacy offerings in Europe and other emerging markets.
The Tempe, Ariz.-based consumer cybersecurity vendor said that Tettnang, Germany-based Avira embraces a freemium business model with more than 30 million active devices and 1.5 million paying customers. NortonLifeLock’s proposed acquisition comes just eight months after Investcorp bought privately held Avira for $180 million, meaning that Avira’s valuation has doubled over the span of 2020.
“We strive to bring cyber safety to everyone, and acquiring Avira adds a growing business to our portfolio, accelerates our international growth and expands our go-to-market model with a leading freemium solution,” NortonLifeLock CEO Vincent Pilette said in a statement. “Culturally, we are a great match.”
NortonLifeLock’s stock is up $0.08 (0.39 percent) in Monday morning trading to $19.34 per share. The deal was announced before the market opened Monday, and is expected to add 3 points of growth to the company’s revenue and be financially accretive in the year following the close with 50 percent operating margin post-synergies. NortonLifeLock didn’t immediately respond to requests for additional comment.
Avira was founded in 1986, hadn’t accepted any institutional investments until the Investcorp acquisition, and employs 512 people, down from 520 employees a year earlier. The deal is expected to close in the fiscal quarter ending April 2, 2021, with Avira CEO Travis Witteveen and Chief Technology Officer Matthias Ollig joining the NortonLifeLock leadership team.
“We are thrilled to become part of NortonLifeLock—a company that is synonymous with trust and leadership in cyber safety,” Witteveen said in a statement. “By leveraging the scale of NortonLifeLock, we can reach and protect more consumers around the globe.”
NortonLifeLock generated more than 72 percent of its $1.24 billion in sales from the Americas in the six months ended Oct. 2, 2020, with less than 16 percent of the company’s revenue during that time frame coming from Europe, the Middle East and Africa (EMEA). That’s slightly more balanced than last year, when the Americas accounted for nearly 74 percent of sales and EMEA accounted for just 15 percent.
Avira provides a consumer-focused portfolio of security and privacy tools for Windows and Mac computers, Android and iOS smartphones, home networks and smart Internet of Things devices. All Avira features are available as licensed software development kits (SDKs) and application programming interfaces (APIs) for OEM partners such as Barracuda, Check Point Software Technologies, Huawei, Lenovo and Sophos.
“We were pioneers in delivering comprehensive Cyber Safety to our consumers via our Norton 360 platform, and now with the addition of Avira’s product capabilities and solutions, we can better serve a broader set of consumers with our combined portfolio and a freemium business model,” NortonLifeLock Chief Product Officer Gagan Singh said in a statement.
The proposed Avira acquisition comes less than a year NortonLifeLock agreed to sell its ID Analytics credit and fraud risk assessment business to LexisNexis Risk Solutions for $375 million. The company was rebranded as NortonLifeLock in November 2019 following the $10.7 billion sale of the Symantec Enterprise Security division to Broadcom.
In the six months ended Oct. 2, 2020, NortonLifeLock’s revenue fell to $1.24 billion, down 1.4 percent from $1.26 billion a year earlier. Net income for the six-month period plummeted to $182 million, or $0.30 per diluted share, down 77.6 percent from $811 million, or $1.26 per diluted share, in the six months ended Oct. 4, 2019.