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Avast expected to complete £2.5bn UK IPO this week

Security software firm Avast could see its market valuation reach £2.5 billion when it lists on the London Stock Exchange this week, based on the latest pricing guidance.

That followed, however, a lowering of its offer price from 250-320 pence per share to 250-270 per share. Avast has not explained why it made this change.

Based on this range, the company’s valuation will be between £2.5 billion and £2.7 billion when the initial public offering (IPO) is completed. People with an understanding of the situation claim this will happen on Thursday.

Currently, Prague-based entrepreneurs Pavel Baudis and Eduard Kucera are Avast’s biggest shareholders, owning 46 per cent of the company.

Meanwhile, CVC Capital Partners has 29 per cent of the business, and Summit Partners has a share of seven per cent. The IPO will enable them to profitably cash out.

Having started-up in 1988, Avast has grown to become one of the world’s largest cyber security software vendors. It currently has more than 400 million customers across the world.

The company employs 1,700 people, with more than 600 of them working in research and development.

Avast initially announced its intention to list on the London Stock Exchange in April. It is expected to become the UK’s largest technology IPO. 

Speaking at the time, Avast CEO Vincent Steckler said the company has experienced massive growth over last 30 years.

“Avast has grown from a visionary start-up to the number one consumer cybersecurity company, with 435m users worldwide.

“This transformation of our company has happened because of the dramatic increase in the number and types of threats around the world which are a growing concern to people, and Avast’s ability to stay ahead of the bad guys with new and evolving technologies and products,” he said. 

In 2017, the company achieved sales of $780 million before interest, tax, depreciation and amortization (EBITDA), or $451 million taking these costs into account. Private equity ownership has also weighed it down with a net debt of $1.35 billion. 

The company had planned a stock exchange listing in the US in 2012, but withdrew citing market conditions, according to Reuters

However, Steckler claimed that the idea of an IPO on the London Stock Exchange now was both “strategic” and “natural”.

He added: “Our large user base creates a strong network effect and powers our advanced next-generation security engine which uniquely combines the latest in machine learning and artificial intelligence and big data to keep people around the world safe online.” 

Last year, Avast acquired Piriform, the maker of the popular application CCleaner, shortly before it was discovered that the company had been embarrassingly hacked. It has since been praised for the openness with which it has reported its investigation into the attack

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