Monday 13 September 2021 5:01 pm

Kape and ExpressVPN agree near $1bn deal after pandemic fuels cybersecurity demand

Cybersecurity firm Kape has agreed to a nearly $1bn buyout of private network operate ExpressVPN ahead of a capital rally to help fund the deal.

The deal, worth around $936m (£676m), should see the enlarged group’s annual revenue climb to as much as $624m next year.  

Kape is set to raise some $354m through an underwritten placing to institutional investors – which will see both existing and new investors being able to participate, in a bid to fund the deal.

While $237m will be handed to Express’ co-founders Peter Burchhardt and Dan Pomerantz in ordinary shares.

“This acquisition is directly in line with our mission to provide a privacy-first end-to-end suite of services capable of capturing the increasing demand in the digital privacy market,” CEO Ido Erlichman said in a statement today.

The cybersecurity boss added that the deal will also “ideally positions Kape to continue to expand our global footprint and product portfolio at a time when digital security and privacy has never been more important.”

Express, which pulls in around $279m in revenue a year, will help Kape further carve out its position in the cybersecurity space, as Express’ VPN covers nearly half of North America.

The cybersecurity firm also expects the buyout to trim its net debt to EBITDA ratio to decline threefold by December next year.

The acquisition forms part of Kape’s latest step towards expansion, as it will allow a front row seat into Express’ talent pool, in its attempts to ramp up its research and development (R&D).