Following on from the massive Intel and McAfee deal, another deal involving a software antivirus company has been announced, albeit on a far smaller scale.

Czech software antivirus company Avast has been given a $100 million shot-in-the-arm following the purchase of a minority stake by equity investor Summit Partners. After being formed in 1991, the security company was once Alvil Software, but is now more memorably known as Avast, sharing its name with the security products it produces.

Unlike many other security software companies, Avast’s focus is on providing a quality free-of-charge security product for the everyday home user, as well as premium products that can be purchased alongside. Avast has always believed that it’s company will do its marketing for them; satisfied customers of the free product will recommend the premium safety product to their friends, family and colleagues. This ‘freemium’ strategy does appear to have worked, at least for Avast, with their product installed on one in five machines globally.

“For 26 years, Summit Partners has been investing in profitable, innovative leaders in the security software industry, and it is rare to find a company such as Avast that redefines how an industry does business. We are very excited about the growth prospects of this exceptional company,” says Han Sikkens, a Principal in Summit Partners’ London office.

Summit’s new investment in the Avast company will be hoped to improve growth and development at Avast, a company that have already proved to be good at thinking outside the box in providing their customers with a unique and safe computer experience through their products. Although not quite as lucrative as the recent deal with Intel and McAfee, this deal between Avast and Summit Partners demonstrates the room for growth that lies within the software antivirus market.

Guest Article by Neil Camp

The security antivirus sector has undergone a major shake-up with the news that Intel, the world’s largest computer chip manufacturer, has bought McAfee for $7.68 billion (£5 billion).

The logic behind the deal, which has come as a surprise to most investment analysts and also to many within the security antivirus sector, is to take a new approach to fighting cybercrime. Intel plans to build security features within the microprocessors that are used to power computers and smaller devices such as mobile phones.

Intel have deep pockets and have offered $48 cash per share for McAfee stock which represents a 60% premium on the McAfee pre-deal share price. Not surprisingly McAfee shares jumped 58% on the news of the bid and the price being offered.

And even though the two companies had been working together for over a year, the deal still caught many unawares. Although both company Boards approved the deal, the takeover will have to be passed by shareholders of both companies and the US regulatory authorities.

Should the deal go ahead – and few see any major problems – the first few products of the amalgamation will be introduced early in 2011.

As the bidder and the ones coughing up the cash, Intel’s shares off 4% to 18.84 US cents.

The BBC was one of many media organisations to run the story and the editor of PC Pro Magazine was one of many who were surprised at the news:

“Intel does buy a lot of companies and it does have a lot of more cash than anyone else out there. So it making a big acquisition isn’t a surprise, but you may have thought it more likely to buy another hardware firm. No doubt Intel is looking ahead and seeing that the laptop and desktop market are probably past their heyday and the big growth area is mobile.

“For a company like Intel, it’s nowhere near as strong in the mobile area as it is in the laptop and desktop areas, so it’s probably looking for new ways to get streams and revenues in the future. Perhaps that is Intel’s point of view but not everybody else’s. The reaction from investors has been quite negative.”

Experts now say that the deal will be a major re-arrangement of the computer antivirus sector, with some firms now feeling on the back foot as McAfee gets access to the sharp end of the industry.

Guest Article by Neil Camp