June 12, 2013 at 08:30 AM EDT
AVG Technologies Acquires the Business of LPI Level Platforms

AVG Technologies N.V. (NYSE: AVG), the provider of Internet and mobile security, privacy and optimization to 150 million active users, today announced that it has entered into an agreement to acquire, subject to closing, the business of LPI Level Platforms Inc., a leading remote monitoring and management software company.

Headquartered in Ottawa, Ontario, Canada, LPI Level Platforms provides next generation remote monitoring and management software (RMM) through Managed Workplace®, its award-winning cloud-based remote monitoring and management platform. With its advanced hybrid agentless architecture, this platform provides visibility and unified management of the entire IT infrastructure, including devices, applications, networks and cloud, while providing superior ease of use, security and control for the user.

The acquisition will enhance AVG’s cloud-based services model by adding LPI Level Platforms’ Managed Workplace® software to AVG CloudCare™, integrating products such as RMM and Mobile Device Management (MDM). In addition, it will significantly expand AVG’s distributor network by adding over 1,500 active LPI Level Platform Managed Service Providers (MSP) partners.

“Since founding the company our mission has been to establish LPI Level Platforms as the ubiquitous remote monitoring, management and automation platform for IT service providers around the world,” said Peter Sandiford, LPI Level Platforms’ CEO. “By adding LPI Level Platforms software to the AVG portfolio, AVG will be in a position to deliver the most comprehensive, innovative, high quality and high performance platform for SMBs and their MSPs in the market.”

“Our two companies share a goal of delivering a powerful, cloud-based IT management platform for MSPs that profoundly simplifies the way you service and protect your small business customers,” added John Giamatteo, Chief Operating Officer of AVG Technologies. “AVG is in a position to develop LPI Level Platforms’ product portfolio and deliver a significantly enhanced product offering globally, leveraging our brand and organization to support growth. The technology requirements for small businesses are increasing day by day as the world migrates towards a mobile working environment. AVG has the infrastructure and partner base to enable customer growth in a safe, cost-effective and secure way.”

AVG CloudCare™ provides small business resellers and MSPs with a free-of-charge, easy-to-use, cloud-based administrative platform, allowing them to remotely deploy and manage their clients’ security with AVG antivirus. AVG CloudCare has amassed more than 1,000 reseller partners and is already managing tens of thousands of small business endpoints across the UK and North America.

Acquisition Overview

  • LPI Level Platforms’ cloud-based and Software-as-a-Service (SAAS) recurring revenue stream is a natural complement to the AVG SMB CloudCare model. LPI Level Platforms and AVG share the same ‘go to market’ approach in the rapidly growing cloud-based services SMB segment.
  • The combination of LPI Level Platforms’ cloud-based RMM/MDM portfolio strengthens AVG’s AntiVirus, content filtering, back-up and optimization portfolio, creating a best of breed platform to address small businesses’ real needs today and tomorrow.
  • From a technology perspective, the convergence of IT management and security is a natural evolution, particularly in the IT services market and the wider SMB market.
  • The combination of both reseller channels (AVG 10,000+ and LPI Platforms 1,500+) provides immediate and sustainable opportunities to cross-sell and upsell both portfolios to each partner base and scale the business globally.

Deal Terms and Financials

  • AVG expects to realize significant synergies by combining platforms and business operations, with the objective of making the acquisition accretive quickly.
  • AVG expects $5 million of subscription revenue related to the transaction in the second half 2013, which is expected to be neutral to non-GAAP earnings. In 2014, subscription revenue is projected to be $15 million and non-GAAP EPS is projected to be in the range of 6-10 cents for this business.

About LPI Level Platforms

LPI Level Platforms provides Managed Workplace®, the remote monitoring and management software and services platform used by thousands of IT service providers around the world to deliver comprehensive IT support to small and midsized businesses. Level Platforms' hybrid agentless technology, extensive management and automation features, deep integration into the IT ecosystem and fully integrated white label support services allow IT services providers to remotely support all of the information technology products and services their end customers rely on from a single, web-based dashboard. "See All. Manage All. Service All." For more information, visit www.levelplatforms.com.

About AVG Technologies (NYSE: AVG)

AVG’s mission is to simplify, optimize and secure the Internet experience, providing peace of mind to a connected world. AVG’s powerful yet easy-to-use software and online services put users in control of their Internet experience. By choosing AVG’s software and services, users become part of a trusted global community that benefits from inherent network effects, mutual protection and support. AVG has grown its user base to 150 million active users as of March 31, 2013, and offers a product portfolio that targets the consumer and small business markets and includes Internet security, PC performance optimization, online backup, mobile security, identity protection and family safety software.

www.avg.com

Use of Non-GAAP Financial Information

This press release contains non-GAAP financial measures. The presentation of this supplemental non-GAAP financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with generally accepted accounting principles in the United States.

Because of these limitations, investors should rely on AVG's consolidated financial statements prepared in accordance with U.S. GAAP and treat AVG's non-GAAP financial measures as supplemental information only.

AVG is providing these non-GAAP financial measures because it believes that such measures provide important supplemental information to management and investors about AVG's core operating results, primarily because the non-GAAP financial measures exclude certain expenses and other amounts that management does not consider to be indicative of AVG's core operating results or business outlook. AVG management uses these non-GAAP financial measures, in addition to the corresponding U.S. GAAP financial measures, in evaluating AVG's operating performance, in planning and forecasting future periods, in making decisions regarding business operations and allocation of resources, and in comparing AVG's performance against its historical performance.

Forward-Looking Statements

This press release contains forward-looking statements within the Private Securities Litigation Reform Act of 1995, including those relating to expected synergies, subscription revenue and EPS contributions from the acquired business. Words such as "expects," "expectation," "intends," "assumes," "believes," “projects” and "estimates," variations of such words and similar expressions are also intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated herein. Factors that could cause or contribute to such differences include but are not limited to: changes in the acquired company's growth, future prospects, business development, results of operations and financial condition; changes in the cloud-based IT software environment and the endpoint security industry; competition from local and international companies, new entrants in the market and changes to the competitive landscape; the adoption of new, or changes to existing, laws and regulations; flaws in the assumptions underlying the calculation of the number of the acquired company's users; the termination of or changes to AVG's relationships with its partners, including Google, and other third parties; the ability to attract and retain active and subscription users; the ability to retain key personnel and attract new talent; the ability to adequately protect its intellectual property; the anticipated costs and benefits of the acquisition; and worldwide economic conditions and their impact on demand for AVG’s and the acquired company's products and services. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements.

Further information on these factors and other risks that may affect AVG's business is included in filings AVG makes with the Securities and Exchange Commission (SEC) from time to time, including its Annual Report on Form 20-F, particularly under the heading "Risk Factors."

The financial information contained in this press release should be read in conjunction with the consolidated financial statements and notes thereto to be included in AVG's reports on Form 6-K and Form 20-F.

These documents are available online from the SEC or in the Investor Relations section of AVG's website at http://investors.avg.com. Information on the AVG website is not part of this release.

All forward-looking statements in this press release are based on information currently available to AVG, and AVG assumes no obligation to update these forward-looking statements in light of new information or future events.

Keep in touch with AVG

Contacts:

United States:
Krause Taylor Associates for AVG Technologies
Betty Taylor
bettyt@krause-taylor.com
+ 1 (408) 981-7551
or
United Kingdom:
Fiona Buckley
PR Director, SMB & Channel, AVG
fiona.buckley@avg.com
+44 (0)7891 532371
or
Investor Relations:
Erica Abrams
Erica@blueshirtgroup.com
+1 (415) 217-5864
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