Teddy Sagi’s Kape acquires ExpressVPN for $936 Million

uklisted teddy sagi expressvpn 936m kape

Teddy Sagi’s billionaire-controlled UK-listed digital privacy company has agreed to pay nearly $1 billion to acquire one of the most well-known global virtual private network providers.

Kape’s acquisition of rival ExpressVPN from its founders for $936 million in cash and stock is one of the largest by a UK technology company in recent years. It is the latest in a string of acquisitions by Kape, which has grown from a small AIM-listed advertising technology company to a consumer privacy and security company with a market capitalization of £800 million.

VPNs, or virtual private networks, enable users to securely and privately connect to the internet. ExpressVPN, based in the British Virgin Islands, is a well-known provider of the technology and was the first to launch servers that wipe all content when restarted. It has 3 million paying subscribers, 40% of whom are in North America. Its revenue increased by 37% to $279 million last year.

ExpressVPN accused Apple of siding with censorship after its app was removed from the iPhone maker’s Chinese online store in 2017. Apple stated at the time that it was “required to remove some VPN apps in China that do not comply with… new regulations.”

In 2009, Peter Burchhardt, a former Microsoft executive, and Dan Pomerantz co-founded ExpressVPN. The duo, along with family members, will receive $237 million in Kape shares and a $172.5 million deferred cash consideration. Both executives will remain with the company following the takeover.

Kape will fund the acquisition with a $350 million share placement and a separate retail offer. Sagi’s company, Unikmind Holdings, will provide financing for the deferred consideration payments and debt refinancing to expedite the transaction.

Following the partnership, Kape will have 6 million subscribers. The combination will give ExpressVPN more firepower to develop its Lightway software and research arm.

In 2012, Sagi, an Israeli-Cypriot who established the gaming software company PlayTech, made his initial investment in Kape. Kape was then Crossrider, a small Israeli advertising technology company. Later, it rebranded and shifted its focus to consumer privacy products, and it has been on an acquisition binge, acquiring competitors ZenMate, Intego, LTMI, and Webselenese.

“This acquisition admirably positions Kape to continue expanding our global footprint and product portfolio at a time when digital security and privacy have never been more critical,” said Ido Erlichman, chief executive of Kape.

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