NortonLifeLock Inc. (NLOK), the US cybersecurity software company, and the Czech antivirus giant Avast have agreed to merge. In a press release on its website, NLOK announced the deal.
As part of the deal, Avast shareholders will receive cash and new shares from NortonLifeLock. Two options will be available: they can receive $2.37 and 0.19 NLOK shares for each Avast share, or they can receive $7.61 and 0.03 NortonLifeLock shares.
The share swap ratio was calculated using the closing price ($27.2) of shares of a US company at the close on July 13, the last day before the two companies were reported to be in talks. The deal could total $8.1-8.6 billion, depending on the shareholders’ choice. Boards of directors of NortonLifeLock Inc. (NLOK) and Avast see the merger as strategically and financially beneficial. They see the new company paving the way for consumer information security.
The combined company will have more than 500 million customers. About $280 million in revenue is expected to be generated by the agreement each year. As a result of the merger, the combined business will benefit from expansion, long-term growth, and cost-saving reinvestment options while generating positive cash flow and having a strong balance sheet.
After the merger is completed, the combined company is expected to post double-digit earnings per share in the first full year and to grow revenue by double digits for several years to come. The deal is expected to close by the middle of 2022. As a result of the merger, the merged company will be listed on NASDAQ.
The shares of NLOK fell by 0.61 percent to $26.09 on Thursday. In the last 12 months, NLOK shares have increased by 15.88 percent, and they have increased by 8.75 percent in the previous week. The stock has risen 2.84 percent in the last three months but has lost 22.57 percent in the last six months.