Seeking Alpha

AVG buying mobile security firm Location Labs for up to $220M

AVG is paying $140M up-front and up to $80M in earn-outs over the next 2 years to buy Location Labs. The deal is expected to close in Q4, and be neutral to 2015 EPS.

Location Labs claims 1M+ paid subscribers for its mobile services, which include anti-virus, cloud backup, device location, and safe driving offerings. The company's location services have been adopted by numerous carriers, and its Sparkle analytics/MDM/location platform has been pre-loaded on 20M phones.

AVG, whose PC-related sales have been hurt by plunging search toolbar-related revenue, declares Location Labs has "effectively cracked the code for mobile monetization" through its partner-driven strategy. With Location Labs in tow, AVG forecasts 2015 mobile bookings of $60M-$70M, and 2016 bookings of ~$100M.

To pay for the deal, AVG has obtained $300M worth of credit facilities.

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