AVG splashes $220 million on mobile services firm Location Labs

Expanding beyond anti-virus

Security firm AVG has decided to splash $220 million (£135 million) on up-and-coming California-based mobile services firm Location Labs, the largest acquisition ever made by the European firm.

Founded in 2002, Location Labs isn't well know beyond the US but has carved out what appears to be a profitable niche embedding its services inside the offerings of US mobile carriers such as Verizon, AT&T, Sprint, T-Mobile and Spanish giant Telefónica.

Its products include software for locating phone users, locking down a phone will driving, and a parental monitoring app for keeping tables on teens. None of this is particularly remarkable - many such apps exist - but Location Labs has been successful at partnering with the mobile brands that pre-load its software.

It also sells an analytics platform for carriers eager to keep tabs on how subscribers are using their devices.

This crosses over with AVG's traditional security focus but also adds a new services-driven approach that gives it a way out of the declining PC antivirus market.

"According to industry estimates, the number of mobile-connected devices will exceed the world's population by the end of this year alone," said AVG's CEO, Gary Kovacs, who took over the firm in 2013 after running Mozilla.

"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 said.

AVG believes the buy will add $60-$70 million in mobile bookings in 2015, rising to $100 million by 2016.

"Adding AVG's proven mobile products to our own services and products will significantly enhance the innovation and support we can provide to our partners,," said Location Labs founder and Tasso Roumeliotis, who will continue to run what will become an AVG subsidiary.

The terms of the deal are that AVG will pay $140 million now with a further $80 million over the next two years dependent on "the achievement of certain performance metrics and milestones," to quote the official press release.

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