AVG secures credit, acquires mobile security firm Location Labs

AVG secures credit, acquires mobile security firm Location Labs

Summary: The antivirus provider will pay up to $220 million for Location Labs in a bid to expand its mobile security portfolio.

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TOPICS: Security, Mobility
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AVG has acquired mobile security firm Location Labs in the hopes of expanding the company's mobile security portfolio and gaining access to valuable partnerships with mobile operators.

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Location Labs, which bills itself as a provider of 'security for humans," offers a mobile device management platform for consumers and the enterprise. The California-based company has been recognized as an Inc. 500/5000 Fastest Growing Private Company for the past five years.

The antivirus vendor says the acquisition will "significantly broaden" AVG's position as an online security provider, and will accelerate the growth of its mobile security division. In addition, by taking on Location Labs and its portfolio, AVG says the company will have access to valuable personal security products and potentially new partnerships with all four major mobile operators in the United States.

"Location Labs' integrated platform for mobile operators, pre-installed service on Android smartphones, and mobile subscription services including family, safety and personal device management, are all expected to complement and expand AVG's existing mobile offerings," the company says.

Under the terms of the agreement, AVG will pay approximately $140 million upfront, in addition to approximately $80 million in cash over the next two years based on performance levels and targets.

Location Labs CEO Tasso Roumeliotis will continue to lead the mobile security firm's team.

Gary Kovacs, CEO of AVG said in prepared remarks:

"Location Labs has effectively cracked the code for mobile monetization through its highly successful business model with industry partners. This acquisition significantly accelerates AVG's mobile strategy in this area. According to industry estimates, the number of mobile-connected devices will exceed the world's population by the end of this year alone.

The combined existing mobile user base of both companies gives us the unprecedented opportunity to deliver online security to approximately a quarter of a billion devices as we see more people go mobile to get online."

AVG's current mobile security offerings include AVG AntiVirus for Android and AVG Zen, an application for both Windows PCs and Android mobile devices.

The acquisition is subject to shareholder approval, and if accepted, the deal is expected to close during the fourth quarter of 2014.

In related news, AVG announced on Wednesday the firm has entered into a commitment letter with Morgan Stanley Senior Funding for senior secured credit facilities to raise up to $300 million.

Under the terms of the agreement, two loans -- one of $250 million and another of $50 million -- will be paid back over six and five years respectively. AVG says the main portion of the loan will be used to acquire Location Labs, while the rest of the funds will be used for general corporate purposes and "future potential acquisitions."

Topics: Security, Mobility

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  • Does Charlie Osborne hate HSBC?

    from the press release:
    "AVG Technologies N.V. (NYSE: AVG), the online security company with 182 million active users, today announced that it has entered into a commitment letter with Morgan Stanley Senior Funding, Inc., HSBC Securities (USA) Inc., HSBC Bank Plc and HSBC Bank USA, N.A. for senior secured credit facilities in the amount of up to USD 300 million."

    So 3 HSBC entities plus Morgan Stanley are funding this acquisition and Charlie only mentions Morgan Stanley. If it's not relevant which banks are funding this, maybe better not mention it at all.
    thefriesian