Acquisition of ZenMate

RNS Number : 1187E

Kape Technologies PLC

16 October 2018

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014

16 October 2018

Kape Technologies plc

("Kape" or the "Company")

Acquisition of ZenMate for €4.8 million

Extending Kape's reach in VPN SaaS provision

Kape (AIM: KAPE), the consumer security software business, is pleased to announce the acquisition of the entire issued share capital of ZenGuard GmbH and ZenMate ("ZenMate"), a multi-platform security software business with a focus on the provision of virtual private network ("VPN") solutions, for a total consideration of €4.8 million (the "Acquisition").

ZenMate is a digital privacy company, headquartered in Berlin, focused on encrypting and securing internet connections and protecting individuals' privacy and digital data.

The Acquisition is highly complementary to CyberGhost, Kape's existing VPN solution, and will deepen the Company's presence in Europe and Germany in particular. ZenMate currently has 50,000 premium customers on a SaaS-basis with a strong retention rate, which will further broaden cross-selling and up-selling opportunities across the Company's product portfolio.

As part of the integration of the Acquisition, Kape will implement an extensive restructuring plan intended to transition ZenMate from a loss of €1.1 million in the year to 31 December 2017 to profitability in the next quarter. This plan includes leveraging existing operational synergies, including utilising Kape's technology infrastructure and extending its user acquisition capabilities.

It is anticipated that the Acquisition will be earnings accretive in the first full year of ownership. As ZenMate's current marketing initiatives are primarily organic, there is significant potential to utilise Kape's digital marketing expertise in order to accelerate user acquisition and increase margins.

ZenMate is being acquired from a number of venture capital funds and private investors, including the founders of the business, for a total consideration of €4.8 million in cash, funded from Kape's internal cash resources, to be satisfied on closing of the Acquisition.

Ido Erlichman, Chief Executive Officer of Kape, commented:

"The provision of data protection solutions is a key focus for Kape, with the market expected to continue its double digit growth in the coming years. We are therefore delighted to add ZenMate to our existing portfolio as it is highly complementary, strengthens our presence in Europe and expands our SaaS user base.

Kape continues to trade strongly and is confident the acquisition of ZenMate will further support the Company's growth ambitions."

Enquiries:

Kape Technologies plc Ido Erlichman, Chief Executive Officer Moran Laufer, Chief Financial Officer	via Vigo Communications
Shore Capital (Nominated Adviser & Broker) Toby Gibbs / James Thomas	[phone]
Vigo Communications (Financial Public Relations) Jeremy Garcia / Antonia Pollock [e-mail]	[phone]

About Kape

Kape is a cybersecurity company focused on helping consumers around the world to have better experience and protection in their digital life. Kape develops and distributes a variety of digital products in the online security space. The Company utilises its proprietary digital distribution technology to optimise its reach and create a superb user experience. Kape offers products which provide online security, privacy and an optimal online experience. Kape's vision is to provide online autonomy for a secure and accessible personal digital life, with team of over 350 people across seven locations worldwide.

www.kape.com

 

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