Monday 8 March 2021 7:00 am

London cyber firm Kape acquires Israeli rival in $150m deal

London-based cybersecurity company Kape Technologies has snapped up Israeli IT firm Webselenese in a deal worth almost $150m (£108m).

Kape, which provides privacy-focused software, said the mixed cash and share deal will help expand its audience and fuel organic growth.

Shares in Kape jumped by more than a fifth after the deal was announced this morning.

Tel Aviv-based Webselense provides consumer privacy and content to millions of users through a number of comparison websites that offer reviews and advice on online security tools.

Kape, which has seen its shares rise by almost a quarter in the last year amid surging demand for cybersecurity services,  said the deal will help its future product development and reduce customer acquisition costs.

Under the terms of the deal, Kape will acquire Webselense owners Uma Capital and Ani Ariel for a total of $149.1m in a combination of cash and shares.

After the close of the transaction the Israeli company’s founders will purchase Kape shares worth roughly $1.5m.

Kape said it will use $32.5m of its own cash to help fund the deal, alongside $84.1m drawn down from a $120m loan from TS Next Level Investments, an affiliate of Kape’s majority shareholder Unikmind Holdings.

The Aim-listed firm said the combined group was expected to post revenue of between $197m and $202m in 2021 and adjusted earnings of between $73m and $76m.

“The acquisition of Webselenese is highly strategic for Kape, providing us with one of the most respected and far-reaching consumer privacy and security content businesses globally,” said Kape chief executive Ido Erlichman.

“By combining this deep level of consumer knowhow with our fast-growing product footprint, we believe the acquisition will be a force multiplier for Kape in our product development and customer reach.”