Security giant Avast has announced it intends to acquire fellow Czech-based antivirus software maker AVG for a purchase price of $25.00 per share in cash — resulting in a transaction that will total around $1.3 billion.

Avast intends to finance the transaction using cash balances it holds, along with committed debt financing from third party lenders.

The deal is aimed at gaining scale and geographical breadth, Avast said today. It also wants to build out its security offerings with an eye on emerging growth opportunities such as in the Internet of Things, as well as on serve existing customers with “more advanced” products.

IoT has been dubbed a security nightmare for consumers, given the accelerating trend for network connectivity to be pushed into all sorts of devices — often by companies with little or no security expertise. But the opening up of this vast new front of potential vulnerabilities is clearly also an opportunity for experienced security players to step in and address.

Organization efficiencies are also expected as a result of the acquisition, so presumably there will be some staff reductions owing to duplicate roles.

On this, a spokeswoman for Avast said: “We haven’t started planning the team integration yet. Over the next months we will be analyzing and planning the organizations, but can’t speak to any potential staff reductions until after that.”

Avast notes that the combined user-base of the two companies will result in an entity with a network of more than 400 million endpoints, of which 160 million are mobile — so that means not just more customers but broader access to intel on malware which it will feed into building out the next waves of its 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, chief executive officer of Avast Software, in a statement.

“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,” added Gary Kovacs, chief executive officer, AVG. “Our new scale will allow us to accelerate investments in growing markets and continue to focus on providing comprehensive and simple-to-use solutions for consumers and businesses, alike.

“As the definition of online security continues to shift from being device-centric, to being concerned with devices, data and people, we believe the combined company, with the strengthened value proposition, will emerge as a leader in this growing market.”

Avast’s spokeswoman confirmed the AVG brand will not be disappearing, saying the company will use a combination of the two brands owing to associated strengths in different markets.

The purchase price of AVG represents a 33 per cent premium over the July 6, 2016 closing price and a premium of 32 per cent over the average volume weighted price per share over the past six months.

The contemplated tender offer — of either 95 per cent or 80 per cent of AVG shares, the latter depending on shareholders approving an asset sale — will be subject to the receipt of regulatory clearances, it notes.

The transaction is expected to close sometime between September 15 and October 15, 2016, depending on the timing of regulatory review.