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AVG Paying up to $220 Million to Acquire Location Labs in Bid to Boost Mobile Efforts

Location Labs brings strong relationships with carriers as well as safe-driving and family-locator apps.

Location Labs

AVG Technologies said Wednesday it is buying privately held mobile security firm Location Labs for $140 million up front, plus as much as $80 million over the next two years.

AVG is looking to the deal to boost its mobile efforts, with Location Labs bringing both relationships with carriers as well as well-established family-locator and safe-driving apps.

“Location Labs has industry-leading technology, and established and deep partnerships with each of the four major U.S. operators — plus others globally,” AVG chief executive Gary Kovacs told Re/code. “This is an important route to market. Most important is that it is an established revenue model, and growing … something that is rare in mobile.”

Kovacs said AVG will be able to build on its base of 182 million users — including 82 million mobile users — to expand Location Labs’ business. All told, AVG says it expects $60 million to $70 million in mobile revenue for 2015 and $100 million the following year.

The space has been heating up with mobile security specialist Lookout recently raising $150 million in additional funding.

The Location Labs deal requires approval of AVG’s shareholders and is expected to close in the fourth quarter of the year and be neutral to next year’s per-share earnings, AVG said. Current Location Labs CEO Tasso Roumeliotis will join AVG and lead that unit’s business.

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