Kape Technologies aiming to raise up to $200m through share placing
Isle of Man-based digital security and privacy software business, Kape Technologies, is to raise $110m to $200m through a placing of shares, it announced today.
The AIM-listed business yesterday (September 12) announced record half year results, and that it was considering, with its syndicate of lending banks, the possibility of materially upsizing the group’s debt facilities to pursue attractive future value-creation opportunities, should they arise.
Today, the group outlined plans to raise cash through a placing with its institutional investors, and an offer to the public via the PrimaryBid platform.
The placing price will be 265p per share, which is a discount of 4.6% to the 30-day volume weighted average price of the company’s shares to September 12, 2022.
The placing will be conducted by way of a bookbuild which will close no later than 6pm BST on Thursday, September 15, 2022.
Kape’s majority shareholder, Unikmind, has agreed to subscribe in the placing for 35,478,149 placing shares, equivalent to around $110m at the placing price.
It is anticipated that the retail offer will open tomorrow, Wednesday, September 14.
In the event of excess demand, the company reserves the right to increase the size of the placing.
Kape has grown both organically and via acquisitions, deploying more than $1.25bn of capital, successfully executing seven acquisitions over the past five years, to become a leading player in the fast-growing digital privacy market.
The most recent was the integration of ExpressVPN, acquired in December 2021, which represents a significant milestone, creating a global privacy platform.
With global scale, and a track record of successfully integrating and growing businesses acquired, the directors believe Kape has significant opportunities to partner with other businesses operating in the digital privacy market who can benefit from Kape’s technology and leading market position.
The group said ongoing turbulent global market conditions have given rise to a number of highly attractive potential acquisition opportunities at compelling valuations which Kape believes could enhance its offering.
Directors believe that the fundraising, together with the group’s strong free cash flow generation and existing debt facilities of $200m, will significantly enhance Kape’s ability to accelerate its growth through acquisitions.
Kape is keen to expand its SaaS customer reach, broaden 9ts current suite of products and accelerate go-to market strategy.
It is currently evaluating a significant pipeline of M&A opportunities, and said there are favourable market conditions for deal flow, adding that a buy and build strategy is central to Kape’s growth strategy.
Kape Technologies also announced today that Dan Pomerantz has been appointed as non-executive director.
He founded ExpressVPN with Peter Burchhardt in 2009, and together they grew it to become a leading digital privacy provider in the consumer market, before Kape acquired ExpressVPN in December 2021 for approximately $936m.
Dan Pomerantz is a serial entrepreneur who started his first company when he was 21 years old. He has more than 15 years’ experience in business leadership and is skilled in operations, marketing, finance, and management.
Don Elgie, non-executive chairman of Kape, said: “Dan’s unparalleled wealth of experience in building products and brands at scale as well as his extensive marketing knowledge will be a key driver for Kape. His input will be incredibly significant as we enter the next phase of growth and expansion for the company.”
Yesterday’s interim results for the six months to June 30, 2022, showed that revenues were $302.396m, up from $95.502m a year ago, while pre-tax profits of $46.2m compare with $7.5m in 2021.
At June 30, 2022, the group had cash of $62.9m, compared with $27m at December 31, 2021, net assets of $917.3m (December 31, 2021: $863.5m), and net debt of $391.9m (December 31, 2021: $457.5m).
