Anti-virus maker AVG files for $125 million IPO
Posted by D. Schoombie 13 January, 2012
(Reuters) – Anti-virus software program maker AVG Technologies NV filed to raise up to 贝 million in an initial public providing, looking to cash in on the increased demand for technologies IPOs.
AVG, which is recognized for its free suite of anti-virus merchandise, monetizes its big user base via targeted advertisements and by driving targeted traffic to on the web search organizations such as Google Inc and Yahoo Inc.
"The entire 'freemium' model has been effective in gaining subscribers, so their strategy appears to be less focused on growing the subscription income – if you look at the growth rate year over year." William Blair & Co analyst Jonathan Ho said.
Under the 'freemium' model, a organization supplies a free basic service and charges for more advanced attributes.
For the initial nine months of 2011, AVG's subscription income rose marginally to 财.1 million, whilst its platform-derived income virtually doubled to ๔.02 million.
The Netherlands-based company, which is backed by Intel Capital, Grisoft Holdings and private equity firm TA Associates, had 106 million active users as of September 30, 2011, according to the filing. But only 15 million users paid for its services.
Analyst Ho, who follows world wide web security businesses such as Symantec, said demand for security software stocks was on the rise given some of the recent concerns associated to widespread hacking.
"I feel that (there is) strong demand for security, given the current cyber-security headlines, and that's giving the folks (a) likelihood to take advantage of the high valuations these stocks are attracting."
Friday's filing comes less than a month right after Avast Computer software BV, an additional Europe-based anti-virus software program maker, filed for a 赨 million IPO.
Earlier last year, data security firm Imperva Inc raised million in its IPO. The stock has climbed more than 66 percent considering that its debut.
"The momentum in the IPO market in the U.S. and the demand for such deals is much greater than Europe and they will absolutely obtain a significantly greater valuation here than in the European market place," Josef Schuster, founder of IPOX Schuster, a fund that specializes in investing in newly public organizations, told Reuters.
AVG reported a net income of .7 million on total revenue of 赦.1 million for the nine months ended September 30.
Yahoo accounted for 21.6 percent of the AVG's total revenue in 2010, whilst Google contributed much less than 10 percent to its revenue in the fourth quarter of the same year, the filing stated.
AVG, which plans to list its shares on the New York Stock Exchange under the symbol "AVG," competes with Symantec and McAfee, which was acquired by Intel Corp.
The book-running managers for the AVG offering are Morgan Stanley & Co, J.P. Morgan Securities and Goldman Sachs & Co.
The proposed providing is expected to consist of ordinary shares to be sold by AVG and specific selling shareholders. The filing did not reveal the number of shares to be sold in the IPO or their expected cost.
The amount of cash a organization says it plans to raise in its initial IPO filings is utilized to calculate registration fees. The final size of the IPO can be various.
(Reporting by Brenton Cordeiro and Himank Sharma in Bangalore Editing by Sriraj Kalluvila, Maju Samuel)
