AVG-Level Platforms Balances M&A Experience Amid Some Cuts

Written by Joe Panettieri 1
July 9, 2013

As AVG Technologies begins to integrate Level Platforms into the company, there are roughly 20 job cuts, MSPmentor estimates. But don't forget: AVG's management team does have M&A expertise and experience.

Only a few weeks after AVG Technologies acquired Level Platforms, the integration process between the two companies is beginning to accelerate. On the upside: AVG has a history of M&A expertise. On the potential downside for some Level Platforms employees, not all positions will be retained — though AVG says the targeted cuts (i.e., redundancies) will not impact its channel commitment or MSP service levels.

The day AVG acquired Level Platforms, AVG made it clear that some Level Platforms positions would be eliminated because of redundancies with AVG’s staff. Today, it sounds like some of those job cuts were made — but rumors about mass layoffs appear over-stated.

“We are making some changes to the organization,” confirmed Luke Walling, VP of sales and operations at AVG. “As we integrate the businesses together there will be some efficiencies found. It won’t impact the way we serve the channel.” Walling declined to discuss how many positions were eliminated but they are not mass layoffs, he said.

My own best guess: The cuts involve around 20 people.

Walling has offered an open door to any MSPs who have questions about the AVG-Level Platforms deal. Plus, he points to AVG’s experience managing M&A deals in a successful manner.

Done Deals

Indeed, Walling himself joined AVG through an acquisition — the 2010 buyout of his own company, Walling Data Systems. Also worth noting are these AVG M&A deals — some of which involved AVG’s former name Grisoft:

2006: Grisoft acquired ewido Networks, an anti-spyware software specialist, and incorporated ewido’s features into new versions of AVG software.
2007: Grisoft acquired Exploit Prevention Labs, developer of the LinkScanner safe surfing technology.
2008: Grisoft was officially renamed AVG Technologies.
2009: AVG acquire Sana Security.
2010: AVG acquired Walling Data and DroidSecurity.

Check around AVG and you’ll find executives and business leaders from many of the acquired companies are still with the software provider — a potential good sign for Level Platforms’ MSPs, despite some exits like Dan Wensley and Rob Rae.

Changing Times

Admittedly, the MSP software industry has reached an inflection point and some MSPs are nervous about all the M&A activity. In addition to the AVG-Level Platforms deal, recent M&A moves include:

Kaseya buying Zyrion — creating a rather large IT service management software company that extends from PC to server, cloud and virtualization management. The deal happened today, and follows Insight Venture Partners’ recent buyout of Kaseya.
SolarWinds buying N-able — a rather intriguing move combining data center management tools with MSP management tools.
ConnectWise researching the market for potential acquisitions, investments or partnerships that extend the Modern Office suite.

Keeping Score — And More

And here’s a wild thought: There are still roughly 4 months until the IT Nation conference starts in Orlando, Fla. The annual gathering typically serves as a year-end reality check for MSPs. Which vendors (and parent companies) will show up at the event? And how dramatically will the software landscape have changed by that time?

It’s no secret that Kaseya, Level Platforms and N-able have been prepping themselves for sale in recent years. The real surprises involve the buyers (AVG, for one) and emerging combinations (Kaseya-Zyrion, for another).

I suspect the surprises aren’t done. Three CEOs from MSP software companies have been in touch with MSPmentor in recent days, suggesting they will be on the sell-side of the table within three to four months.

Let the games begin… er, continue.