Avast Software agreed to buy AVG Technologies NV (NYSE: AVG) for $1.3 billion in cash to add software to protect mobile phones from malware as it aims to tap into the growing number of physical devices connected to the internet.

Cybersecurity deals have been picking up in the middle market. Accenture plc (NYSE: CAN) purchased cybersecurity Maglan; FireEye Inc. (Nasdaq: FEYE) bought iSight Partners; and Thoma Bravo LLC acquired Bomgar.

Avast, which is backed by private-equity firm CVC Capital Partners, will begin a tender offer for Amsterdam-based AVG at $25 a share in cash, the companies said in a statement Thursday. That’s 33 percent above AVG’s closing price Wednesday on the New York Stock Exchange.

The deal will give Prague-based Avast more opportunities in internet security-related business, providing it with more scale and an increased geographical reach in both its core business and newer areas such as Internet of Things, according to the statement. The Internet of Things is the name used to refer to the network connecting physical devices, ranging from fridges to cars and clothes, to the internet, a growing area of focus for companies.

The deal between the two companies, both of which were founded in the Czech Republic more than 20 years ago, will provide Avast with 400 million so-called endpoints, 160 million of which are mobile. Avast says it protects 230 million people and businesses with its applications.

Bankers from Jefferies International Ltd. advised Avast, while White & Case LLP and De Brauw Blackstone Westbroek NV provided legal advice. Morgan Stanley is AVG’s financial adviser and Bridge Street Securities LLC is advising AVG’s supervisory board. Orrick, Herrington & Sutcliffe LLP and Allen & Overy LLP are legal advisers to AVG.

Private-equity firm TA Associates, AVG’s biggest shareholder with a 13 percent stake, has agreed to tender its shares. Avast plans to fund the transaction using cash on hand and debt financing. Credit Suisse Group AG, Jefferies and UBS AG agreed to provide $1.69 billion in financing. Avast also has contributed $150 million in equity investment.

Closely held Avast planned an initial public offering in 2012, but canceled the sale because of market conditions.

Additional reporting by Mergers & Acquisitions' Demitri Diakantonis

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