NortonLifeLock buys Avira for $360 million
On December 7, 2020, NortonLifeLock officially announced that it buys the German vendor Avira for $360 million.
The German company Avira Operations GmbH has accumulated a large user base – more than 30 million devices. This goal was achieved through the freemium business model: users can install basic Avira antivirus for free, but it is limited in functionality compared to the paid versions.
The company makes a profit by selling premium versions to users. The professional versions of Avira’s antivirus products offer advanced protection features such as email filtering, ad blocking and advanced malware protection.
Through the acquisition of Avira, NortonLifeLock hopes to enter the freemium product market as well as the European and emerging markets.
NortonLifeLock CEO Vincent Pilette said:
“I am delighted to welcome Avira to the Norton family. We’re committed to providing protection for every user, and the acquisition of Avira adds a growing business to our portfolio, accelerates our international growth and expands our go-to-market model with a leading freemium solution. We perfectly match each other. We constantly strive to provide customers with innovative products and always put customers first. We can’t wait to get started with Avira.”
NortonLifeLock is expected to bring a number of economic and financial benefits from this deal:
- Developing NortonLifeLock’s long-term strategy to ensure cybersecurity for everyone.
- Accelerating international growth in Europe and key emerging markets.
- Entering the freemium market and expanding the user base by 30 million active devices.
- Growth of company’s revenue by 3 points thanks to 1.5 million paying customers.
- Financial growth in the first year for reaching approximately 50% of the operating margin.
As a reminder, in April 2020, Avira was acquired by Investcorp Technology Partners for $180 million. Thus, the company has effectively doubled its value in the past eight months.
However, according to the October AV-Test rating, Avira has rapidly slipped from the fourth place (it was right after the original three) to the 20th. The main reason is a significant loss of protection efficiency – the German antivirus showed even worse protection indicators than Malwarebytes.
Avira is not a tech startup in the usual sense of the term. The company was founded in 1986 and was launched from absolute zero, without attracting external investments. The company’s antivirus software was sold to Facebook and other large corporations on a white-label basis. Today the strategic partners of the German vendor are NTT, Deutsche Telekom, IBM, Canonical and many others.