Organic Growth Masterclass: Avira, backed by Investcorp
Gilbert Kamieniecky, Managing Director of private equity firm Investcorp, explains how their cybersecurity portfolio firm Avira achieved organic growth success.
Avira provides cybersecurity software solutions to consumer and OEM (Original Equipment Manufacturer) end markets globally. Founded in 1986, it was one of the earliest businesses operating in the market and is the original pioneer of the freemium software business model to offer security products free-of-charge.
Gilbert Kamieniecky, Investcorp Managing Director says: “Avira represented an attractive opportunity to invest in cybersecurity, a vertical that we like and know extensively, combined with the fact that it is a growing recurring subscription revenue business that has done very well over the years. We acquired Avira in April 2020 for $180 million, before selling it seven months later for $360 million. We were the first institutional investor coming into the company, so we felt there were many opportunities to add value to it.”
BOOSTING THE TEAM
He explains: “When we first came in we hired some additional team members to complement the existing management team. We upgraded the finance function and made some changes around sales and marketing where we felt there was an opportunity to accelerate the growth of the business. The addition of these team members served to complement the existing leadership of the CEO and CTO, enabling us to execute an ambitious growth strategy in just a short period of time.”
Gilbert says: “Avira has a strong brand, having been one of the earliest cybersecurity firms and is well recognised by most people in Germany and the DACH region. However, we felt we could add value by accelerating Avira’s international expansion and roll out of its first-class technology suite to more markets. Prior to our investment, the company already had a strong presence in Germany with offices across the EU, the US, and Asia which we continued to support.”
“We were also able to help Avira make an add-on acquisition as part of a wider security consolidation play. As a result, the company’s Ebitda has grown significantly during our ownership.”
He says: “Investcorp played an important part in helping Avira to win some large OEM contracts. An increasing part of Avira’s business is providing solutions to other cybersecurity players. Obtaining a significant number of new contracts with large, well known providers over the last few months is a combined result of Avira’s leading tech and Investcorp’s help in further professionalising the business.”
He adds: “The sale of Avira, which roughly doubled our original investment, represents one of Investcorp’s quickest portfolio company exits to date. We did not originally plan to sell quickly; however the opportunity to combine with Norton was very compelling for the business and we wish them the best. The sale is a testament to the quality of Avira’s management team and to our ability to help execute quickly on various avenues of profitable growth.”