Netherlands-based security software company AVG Technologies raised $128m from its initial public offering (IPO) on Thursday, with shares priced at $16.00. Equal shares of about $59.5m each went to AVG and its shareholders.
Intel Capital divested about 737,000 shares, earning a payout of around $11.8m, and it has also retained 11.9% of AVG’s stock, post IPO. Other leading institutional sellers were Polish Enterprise Fund (1.66 million shares), Grisoft Holdings, essentially a holding company for ex-chief executive Gabriel Eichler).
Private equity firm TA Associates, however, held on to all of its stock. TA acquired a 31.8% share in AVG in 2009, paying a reported $200m to do so, and is now AVG’s largest institutional shareholder, owning 28% of its stock.
Underwriters for the offering, all of which exercised an option to purchase available shares, were Morgan Stanley (2.48 million shares sold), JP Morgan (2.16 million), Goldman Sachs (1.76 million), Allen & Company (800,000), Cowen and Company and JMP (400,000 each).
However, AVG’s stock performed disappointingly on flotation, closing at $13.00 on its first day, a fall of almost 19%. The price recovered during initial trading on Friday, only to retreat back to $13.09 at the close.
JR Smith, chief executive officer of AVG, has an optimistic outlook regardless, telling news agency Reuters following the debut: "There’s been real optimism in the tech market (right now). We saw the announcement by Facebook yesterday, and we saw some really high-quality investors coming into our book."
Post-acquisition, Intel agreed with AVG on measures intended to prevent Intel taking advantage of its stake in AVG, involving Intel being unable to access commercial information for AVG or to appoint a member to its board. Following the offering, Intel will be treated the same as any other public shareholder, but will continue to effectively compete with AVG’s standalone products.