AVG to buy MDM provider Location Labs in $220m deal

By Sooraj Shah
04 Sep 2014 View Comments
An AVG logo

Internet security firm AVG has agreed to buy mobile device management (MDM) provider Location Labs in a deal worth up to $220m (£134m).

Emeryville-based Location Labs' services include Family Locator, Drive Safe and Account Analytics & Controls – all security-based controls for consumers. It provides a pre-installed service on Android smartphones and holds deals with mobile operators, including AT&T, Sprint, T-Mobile, Telefonica and Verizon Wireless.

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The company had raised nearly $26m since it was founded in 2002 and was backed by the likes of BT, Intel Capital and Qualcomm Ventures.

Location Labs claims that its services are distributed to more than 50 million users, although it has a smaller figure - one million - of monthly paying subscribers.

AVG claims that with the acquisition and organic growth combined it will create a global business generating between $60m and $70m in mobile bookings in 2015, and anticipates this to increase to around $100m in 2016. 

"Location Labs has effectively cracked the code for mobile monetisation through its highly successful business model with industry partners. This acquisition significantly accelerates AVG's mobile strategy in this area," said Gary Kovacs, CEO of AVG.

"According to industry estimates, the number of mobile-connected devices will exceed the world's population by the end of this year alone. The combined existing mobile user base of both companies gives us the unprecedented opportunity to deliver online security to approximately a quarter of a billion devices as we see more people go mobile to get online," he added.

Under the terms of the agreement, AVG will pay about $140m initially, with an additional $80m in cash to be paid over the next two years depending on the achievement of certain performance metrics and milestones.

The transaction is expected to close during the fourth quarter of 2014, subject to shareholder approval and other closing conditions.

Following the close of the acquisition, Location Labs CEO Tasso Roumeliotis will continue to lead the Location Labs unit of AVG. There has been no announcement on whether the company's 214 employees will be affected by the impending acquisition. 

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