Avast Software, a maker of the security software, and AVG Technologies, a developer of business, mobile and PC device security software applications, have entered into a purchase agreement in which Avast will offer to purchase all of the outstanding ordinary shares of AVG for $25.00 per share in cash, for a total consideration of approximately $1.3 billion.

Avast plans to finance the transaction using cash balances on hand and committed debt financing from third-party lenders. Avast has received a financing commitment of $1.685 billion from Credit Suisse Securities, Jefferies and UBS Investment Bank. In addition, Avast has contributed $150 million in equity investment to fund the transaction. The proposed transaction is not subject to a financing condition.

Both companies were founded in the Czech Republic in the late 1980s and early 1990s and expanded internationally in the 2000s. They will be combining complementary strengths to position Avast for continued growth in the security industry.

Avast is pursuing this acquisition to gain scale, technological depth and geographical breadth so that the new organization can be in a position to take advantage of emerging growth opportunities in internet security as well as organizational efficiencies. The technological depth and geographical reach will help Avast serve customers with more advanced security offerings in the core business and new innovations in emerging markets, such as security for IoT devices.

Combining Avast’s and AVG’s users, the organization will have a network of more than 400 million endpoints, of which 160 million are mobile, that act as de facto sensors, providing information about malware to help detect and neutralize new threats as soon as they appear. This increase in scale will enable Avast to create more technically advanced personal security and privacy products.

“We are in a rapidly changing industry, and this acquisition gives us the breadth and technological depth to be the security provider of choice for our current and future customers,” said Vince Steckler, CEO of Avast Software. “Combining the strengths of two great tech companies, both founded in the Czech Republic and with a common culture and mission, will put us in a great position to take advantage of the new opportunities ahead, such as security for the enormous growth in IoT.”

“We believe that joining forces with Avast, a private company with significant resources, fully supports our growth objectives and represents the best interests of our stockholders,” said Gary Kovacs, CEO of AVG.