Cybersecurity firm Avast eyes £3.2bn valuation in London listing

Cybersecurity firm Avast is reportedly targeting a market capitalisation of between £2.5bn and £3.2bn in its IPO.

The private equity-backed company has a set a price range of between £2.50 and £3.20 a share according to Reuters. It is aiming to sell around 25% of the company and raise about $200m in proceeds from the issue of new shares through the London listing.

Avast is 46%-owned by its founders, Czech entrepreneurs Pavel Baudis and Eduard Kucera. While CVC Capital Partners holds a 29% stake, with Summit Partners holding 7% of the business.

In 2017, Avast’s adjusted revenue was $780m and adjusted cash earnings before interest, tax, depreciation and amortization (EBITDA) was $451m.

Avast has created a scalable cloud-based security infrastructure that claims to ‘see everything’ that happens on the internet, giving it the advantage of being first to inspect and analyse potential threats.

Its 400 million worldwide sensors enables it to discover and analyse the latest threats before they can damage a business. Its cloud-based Smart Scan also helps businesses discover any threats hidden on a network unobtrusively. Topped off with daily invisible micro-updates, Avast antivirus aims to ensure nothing compromises your endpoints.

In 2015, Cybersecurity business Sophos began trading publicly in the largest ever initial public offering for a UK software company on the London Stock Exchange. The company raised $125m on a valuation of £1.013bn ($1.6bn).

Recent research from FinTech Global found that capital invested in cybersecurity in Q1 2018 declined by half compared to Q4 2017.

Total investment in Q1 2018 reached just $725.8m, a fall of 47.7% from the previous quarter. However, compared to the same quarter in 2017, total funding increased by 27%. The drop in investment in Q1 2018 can be attributed to a lack of later-stage deals valued above $100m.

The $725.8m invested in Q1 2018 equates to just 15.7% of last year’s total funding. Thus, if investment continues at this pace, it is not projected to surpass 2017’s total. However, investment was similarly slow at the beginning of 2017 and gained momentum later in the year.

Copyright © 2018 RegTech Analyst

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