Netherlands-based AVG Technologies today announced the pricing of its initial public offering of 8.0 million ordinary shares at a priced to at $16.00 per share, an offering that in total will raise approximately $128 million, but net slightly less than $64 million in the company’s pockets after investment banking fees, underwriting discounts and commissions.
A total of 4.0 million shares are being offered by AVG, and a total of 4.0 million shares are being offered by selling shareholders—of which the proceeds will not go to the company. Additionally, certain selling shareholders have granted the underwriters a 30-day option to purchase up to an additional 1.2 million shares to cover over-allotments, if any.
Shares of the anti-virus and security software firm will begin trading February 2, 2012 on the New York Stock Exchange on under the ticker symbol "AVG."
AVG provides Internet security software, primarily targeted to the consumer marker. The company claims over 100 million active users in 170 countries, though many are users of its free software products.
The company distributes its products primarily online, allowing it to generate high-margin revenue from direct distribution of its premium products and search agreements with search engines. AVG also has a network of resellers and distributors, including CNET, Ingram Micro and Wal-Mart.
In 2010 the company reported revenue of $217.2 million, representing a compound annual growth rate of 38.1%. For the nine months ended September 30, 2011, AVG generated revenue of $198.1 million, adjusted net income of $104.8 million and free cash flow of $66.2 million.
With its solid cash generation and previous financing deals in place, the company has been able to grow and do some acqusiitions to support its growth.
In November 2010, the company announced that it would acquire DroidSecurity, a cloud-based mobile security company based in Tel Aviv.
In March 2011, the company secured $235 million in credit financing through a syndicate arranged by J.P Morgan and Morgan Stanley. Representing its first-ever capital markets transaction, the $235 million five-year term loan gave the company additional firepower to increase growth organically, as well as make acquisitions and pay a dividend to some existing shareholders.
The company acquired TuneUp Software, a provider of PC optimization software, in August 2011. More recently, in December 2011 AVG acquired Bsecure Technologies, a provider of consumer-focused Internet filtering and anti-virus software, an acquisition that the company said would further help penetrate the home Internet security market.
While the company does have a strong focus on the consumer market, it does plan to expand its offerings to the business market. “We intend to increase our presence in the small business market,” the company noted in its F-1 filing. “We expect to continue to develop our offerings by adding features and functionalities tailored towards this customer segment, such as security delivered through a software-as-a-service model.”
The company says it has been able to increase its revenue per active user from $1.53 for the twelve months ended December 31, 2008 to $2.21 for the twelve months ended December 31, 2010, and from $1.63 for the nine months ended September 30, 2010 to $1.94 for the nine months ended September 30, 2011.
The lead underwriters for the offering are Morgan Stanley and Goldman Sachs. Allen & Company, Cowen and Company, and JMP Securities will serve as co-managers.