CVC buys $1bn AVAST

Despite closing a new fund last year, CVC is still investing its €10.75bn fifth fund, a 2008-vintage.

CVC Capital Partners has invested in AVAST, a US-based security software company, in a deal that values the company at $1 billion, according to a statement.

The exact stake bought by CVC has not been disclosed. It is understood the firm negotiated with the company exclusively for a number of months. The transaction is expected to complete in March 2014.

AVAST, founded in 1988, provides security software for PCs, smartphones, and tablets for both businesses and home users. The company has more than 200 million users in 40 languages and its software protects nearly 170 million PCs.

CVC said it would support the business in its efforts to become the number one PC security provider in the US and Asia. “We firmly believe in its ability to offer more to its 200 million users driven by the philosophy that its free products should be better than the paid products offered by others.” Lorne Somerville, a partner and head of TMT at CVC said in the statement.

CVC declined to comment beyond the statement, but a source close to the situation said the firm made the investment using CVC European Equity Partners V, a €10.75 billion fund it closed in 2008. This was also true of the two deals it completed in the latter half of 2013: the simple meals business of NYSE-listed Campbell Soup Company, which it bought for €400 million in October, and warranty specialist Domestic & General, which it bought for £800 million from Advent International in August.

Fund V’s performance was valued at a 1.2x multiple and a 9.6 percent internal rate of return as of 30 June 2013, according to data from the California Public Employees' Retirement System (CalPERS).

Last July, CVC reached its €10.5 billion hard-cap for its successor fund after turning away some €3.5 billion of additional capital, PEI reported at the time.

Jefferies International provided advisory services to CVC. Credit Suisse, UBS and Jefferies provided committed financing to the company, including further facilities to fund investments and acquisitions.