Avast, which owns the popular consumer antivirus company AVG, will apply to list its shares on the London Stock Exchange in the hope of raising $200mn (CZK4.1bn) in primary proceeds from an IPO, the Czech-founded company announced on April 12.
The cyber security company hopes to get an additional $800mn in secondary sales, a well-placed source told Reuters, which would raise its market valuation to approximately CZK82bn ($4bn). The main aim of the listing is to get cash to pay down debts and finance growth.
“The company has grown amid a dramatic increase in the number and type of threats since it was founded in 1991, and thanks to its ability to stay ahead of the bad guys,” CEO Vincent Steckler said in a statement. “A listing on the London Stock Exchange is a natural fit, providing us wider access to capital markets and supporting the future growth of our business in the years ahead.”
Avast already tried to float its shares once before, on the US Nasdaq exchange in 2012, but the offer was pulled due to poor market conditions.
BH Securities analyst Martin Vlcek said the fact that Avast now anticipates being included in the UK’s FTSE index could be a big plus, and that the timing is right. “The problems of the biggest companies in the sector like Facebook, Amazon or Alphabet is not affecting other technology companies, and the sector shows great promise for increased sales and profits from shares. So Avast can be a very interesting newcomer,” Vlcek said.
J&T Bank analyst Milan Vanicek said that although London is still the financial heart of Europe and investment potential is significant there, it is a bit disappointing that Avast doesn’t aim to be listed on the Prague bourse.
Frantisek Bostl of Starteepo company, which helps companies list shares, expressed a similar view. “The timing couldn’t be better in relation to high pricing of the tech companies. Avast, however, should count also with the option of listing in Prague and offer the domestic investors to participate in the future growth,” Bostl said, adding that Nasdaq could be a better choice due to uncertainty around Brexit.
Avast was taken over by CVC Capital Partners in 2014 and is looking to cash out some of the gains made since then. Other minority investors include Summit Partners and Czech entrepreneurs Pavel Baudis and Eduard Kucera, who founded the company in 1991.
Avast bought Czech competitor AVG for $1.3bn in 2016. Regarding turnover, Avast is the second biggest anti virus company in the world after Symantec, with 435mn users, out of which 260mn are PC users and 145mn mobile users.
The company had consolidated incomes in 2017 of $653mn, an annual increase of 91%. However, after making a profit of $25mn in 2016, in 2017 the company suffered a loss of $34mn. The operating profit increased four times to $124mn.
Avast employs 1,600 people worldwide, 1,000 of them in Czechia. It has 15 branches around the globe. The most significant markets are the US, Brazil, France and fast-growing India.
Major competitors include Slovak-based ESET, US Malwarebytes and McAfee, UK Sophos and Kaspersky Lab of Russia.