Kape receives $1.5bn proposal to go private
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The public parent company of ExpressVPN, Private Internet Access and CyberGhost may soon become a private entity – wholly owned by the current majority shareholder, Unikmind.
The entity, owned by billionaire businessman Teddy Sagi, has proposed buying all of the shares of Kape Technologies it does not own and delisting the company. This offer, pricing Kape at a premium of just over $1.5 billion, comes one year after the acquisition of heavyweight ExpressVPN (opens in new tab) for $936 million.
The offer documentation (opens in new tab) is hefty and says the offer reflects a desire to ‘continue to exist’ [the company’s] expansion” and “enable long-term capital investment conducted outside of public markets”.
“We are committed to Kape’s continued growth within our group of companies, enabling it to leverage operational synergies and access capital for its continued growth, especially as technology convergence gains momentum,” said Sagi.
What does it mean for users?
What does this mean for the seven million subscribers who use Kape’s various VPN and security products?
Unikmind says it “does not intend to make any material changes to Kape’s business (other than possible acceleration of inorganic growth), broader strategic plans or locations and business locations.”
The proof is in the pudding. In particular, we will be looking for Kape’s VPN brands to continue their publishing track record independent audits (opens in new tab).
Unikmind’s offer makes several references to “expansion” and a “buy-and-build strategy”, including the comment that in the current market “availability of potential acquisitions can be increased”.
Between this offer and Kape’s recent posting news, where the company talks about securing additional funding to increase Kape’s ability to accelerate its growth through acquisitions, Unikmind is clearly expressing an interest in increasing its privacy and security interests.
Echoes of McAfee
This potential deal comes 11 months after a parallel move in the consumer cybersecurity industry in which McAfee was taken private by a group of investors for $14 billion. McAfee had communicated the take-private deal as an opportunity for the investor group to “provide McAfee with both financial and operational resources to further enhance its consumer offerings and respond to the rapid growth in consumer demand for digital security services.”
McAfee has since been McAfee+ service, which combines its antivirus offerings with a VPN, a password manager, identity theft and credit monitoring.
While the Kape private deal is much smaller, it’s clear that the burgeoning privacy and security opportunities are appealing to investors.