UK digital privacy vendor Kape Technologies is set to be taken over by major shareholder Teddy Sagi’s Unikmind Group, the company revealed today.
The AIM-listed business told investors this morning that its board had accepted an offer of £2.85 per share from Unikmind. Israeli businessman Sagi already owns a 55% stake in Kape. The deal will value the business at £1.25bn.
If concluded, this price would represent a 9% premium on Kape Technologies’ closing share price on Friday. The company’s share price shot up 12% this morning, to £2.90 at the time of writing.
Unikmind plans to grow Kape Technologies
Based in London, but with staff working from offices around the world, Kape Technologies employs more than 1,000 people. It is the company behind a number of VPN brands such as ExpressVPN and CyberGhost VPN, as well as Apple-focused security software Intego Antivirus. Its last reported annual results, filed in March 2022, showed revenue up 89%, to $230.7m (£191.1m at current conversion rates), with operating profit of $38m (£29.9m).
In a statement to the markets this morning, Kape’s directors said it received an initial offer from Unikmind on 9 December last year, with Sagi’s organisation offering £2.65 per share for the company’s outstanding holdings. This was rejected as “offering insufficient value to shareholders”, the statement says, but the companies entered a non-disclosure agreement so that Unikmind was able to “access to certain limited information about the business and its prospects in order to encourage a higher offer”.
This duly materialised on January 13, the statement adds. The Kape directors said they had chosen to accept the offer given that Unikmind had signalled its intention to “seek a delisting of the company regardless of the outcome of the offer”.
Sagi said he plans to grow the business through acquisitions of more brands in the digital security space. “The last decade has witnessed the rapid growth of digital services with the expansion of e-commerce,” he said in a statement. “Kape has, with our support as the majority shareholder, transformed through several strategic acquisitions, into a truly global leader in the digital privacy and security space. Having weighed the pros and cons of a public listing under the current macro uncertainties and thin stock market trading as well as new growth avenues, we are firm in our view that Kape’s next chapter in its corporate journey should be within the private arena.”
He continued: “We are committed to Kape’s further growth within our group of companies, enabling it to exploit operational synergies and to access capital for its continuous growth, especially as the convergence of technologies is gaining momentum. Recognising that not all Kape shareholders may wish to continue with us in a non-listed Kape, our cash offer represents a compelling proposition for fellow shareholders to realise their investment.”
UK stock market loses another tech business
If Kape Technologies, which listed on AIM in 2014, is removed from the London market, it will become the latest UK tech company to go private in recent months.
Several deals were mooted last autumn, when the weak pound made British businesses an attractive target for foreign investors. And though proposed takeovers of cybersecurity vendor Darktrace and digital identity specialist GB Group fell through, another security company, Avast, was taken over by US rival NortonLifeLock, and Schneider Electric purchased the full share capital of engineering software vendor Aviva.
More recently, the takeover of UK enterprise IT stalwart Micro Focus by Canada-based OpenText was completed at the end of last month. The $5.8bn deal has seen Micro Focus disappear from the UK stock exchange, and it will now be incorporated into OpenText’s offering. “Digital life is life, and with Micro Focus’ great products and talent, we will help organisations of all sizes accelerate their digital transformation,” said OpenText CEO and CTO Mark J. Barrenechea.