Home M&A Report MA Bilateral Report 28.07.2021

MA Bilateral Report 28.07.2021

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MA Bilateral Report 28.07.2021

NortonLifeLock Inc to merge with Avast PLC

 

NortonLifeLock Overview:

NortonLifeLock Inc., formerly Symantec Corporation, is engaged in the consumer cyber safety business. The Company focuses on allowing customers to be productive and protected at home and at work. Its Norton-branded services provide multi-layer security and identity protection on desktop and mobile operating systems, to defend against online threats to individuals, families and small businesses. Norton products help customers protect against threats and address the need for identity protection, while also managing the increase in mobile and digital data, such as personal financial records, photos, music and videos. Its products include Norton AntiVirus Plus, Norton 360 Standard, Norton 360 Deluxe, Norton 360 with LifeLock Select, Norton 360 with LifeLock Advantage, Norton 360 with LifeLock Ultimate Plus, Norton Secure virtual private network (VPN), Norton Privacy Manager, Norton Family Premier, Norton Mobile Security for Android, Norton Utilities Premium and Norton Small Business.

Avast PLC Overview:

Avast plc is a United Kingdom-based company that provides security software. The Company offers products in two segments: consumer products and products for the small and medium business (SMB). It offers consumer personal computer antivirus security software under the Avast and AVG brands. Its consumer products include offerings for desktop security and mobile device protection. Its consumer offerings include Avast Free Antivirus, Avast Security for Mac, AVG Antivirus FREE and AVG Antivirus for Mac, Avast Pro Antivirus, Avast Internet Security and AVG Internet Security, Avast Premier, Avast Ultimate and AVG Ultimate and AVG Driver Updater. Its SMB offerings include Avast Business Antivirus, Avast Business Antivirus Pro, Avast Business Antivirus Pro Plus, Avast Managed Workplace, Avast Business CloudCare, AVG File Server Edition, AVG Antivirus Business Edition, AVG Internet Security Business Edition, and Avast Cloud Secured Web Gateway and Unified Threat Management.

 

Deal Purpose:

A combination of NortonLifeLock and Avast would bring together two companies with
aligned visions, highly complementary business profiles and a joint commitment to innovation that helps protect and empower people to live their digital lives safely. The objective is to create a clear leader in consumer security software and ensure that the merger would benefit customers, reward employees and maximise long term value for all shareholders.

Deal Outcome:

Expected Pro-Forma EPS After Synergies: 1,262
Expected Accretive/Dilutive Type: Accretive

Expected Deal’s structure:

NortonLifeLock said it was considering a cash and shares bid for Avast. No price was given,
but the Wall Street Journal reported that Avast could fetch around $8bn (£5.8bn). Shares in Avast surged 13% on the news to reach the speculative deal price.

According to Berenberg, Avast PLC should not settle for a value of less than US$10bn
(£7.25bn) in merger talks with US peer NortonLife Lock.

As shown in the next section, the valuation performed by FSB analysts suggests a similar price to Berenbeg, valuing Avast Plc at $9,99B

Valuation methodology:

The comparable company analysis using multiples was used in order to perform the valuation analysis for Avast Plc. A list of companies operating in “Security Software Industry” were selected. The initial list which comprises 50 companies was narrowed down to four comparable companies.

After performing the valuation using the multiples approach, Avast Plc value is
estimated to be $9,99 B based on the Enterprise value to EBITDA approach.

 

Sources:Thomson Reuters:
https://emea1.apps.cp.thomsonreuters.com/web/Apps/Corp/?s=AVST.L&st=RIC#/Summary
https://emea1.apps.cp.thomsonreuters.com/web/Apps/Corp/?s=NLOK.O&st=RIC#/Fundamental
https://www.wsj.com/articles/nortonlifelock-in-talks-to-buy-avast-11626287085
https://www.reuters.com/technology/nortonlifelock-talks-buy-avast-wsj-2021-07-14/
https://www.proactiveinvestors.co.uk/companies/news/955133/avast-worth-us10bn-to-suitor-norton-reckons-berenberg955133.html

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