KAPE.L Regulatory News (KAPE)

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014

14 March 2017

Crossrider plc

("Crossrider" or the "Company")

Acquisition of leading cyber security SaaS solution

Crossrider (AIM: CROS), the online distribution and digital product company, is pleased to announce the acquisition of the entire issued share capital of CyberGhost SRL ("CyberGhost") for an initial consideration of €3.2 million in cash, €3.0 million through the issue of 4,057,813 options over ordinary shares exercisable at nominal value and an EBITDA based earn-out payment capped at €3.0 million (the "Acquisition").

CyberGhost is a leading cyber security SaaS provider, with a focus on the provision of virtual private network ("VPN") solutions. The Acquisition is expected to be earnings enhancing in the current financial year. In the year to 31 December 2016, CyberGhost generated EBITDA of $1.0 million1 and significant levels of recurring revenues from subscribers.

Rationale and benefits of the Acquisition

The Acquisition is in line with the Company's stated strategy to broaden its product offering to service high growth consumer markets, of which cyber security is a key vertical.

The acquisition of CyberGhost brings significant strategic benefits to Crossrider, namely:

· Expanding the Company's footprint in the high growth cyber security market

· Increasing Crossrider's user base, delivering an average of c.145,000 paying subscribers per month, with a low churn rate and c.1.5 million active users per month

· CyberGhost's market-leading software, which is compatible with iOS, Android, Windows and Mac devices

· Synergies between CyberGhost and Crossrider's App Distribution and Media divisions

· Economies of scale with Crossrider's existing App Distribution platform; integration of CyberGhost is expected to accelerate its current sales pipeline whilst also improving operating margin

The global VPN market is growing rapidly with the usage of mobile VPN in particular continuing to increase with projected CAGR of 21% for 2017-20222. CyberGhost's solution focuses on safeguarding personal information when browsing the Internet through unsecured mobile hotspot; its customer base growth is mainly due to the growing concerns around data security and safety. The board believes this burgeoning market offers significant opportunity for future profit growth and product expansion.

Details of the Acquisition

CyberGhost is being acquired for a total consideration of up to €9.2 million, details of which are set out below.

Of the €9.2 million maximum consideration, the initial consideration is to be satisfied on closing of the Acquisition by a €3.2 million cash payment to the vendor of CyberGhost and €3.0 million through the issue of 4,057,813 options over ordinary shares in the capital of the Company ("Ordinary Shares") exercisable at the nominal value of the shares ("Consideration Options"). The Consideration Options are exercisable in two equal portions on the second and third anniversary of completion of the Acquisition and if exercised in full, would represent 2.87% of the existing issued share capital of the Company. The earn-out of up to €3.0 million, which is payable subject to the continued involvement of Robert Knapp, CEO and founder of CyberGhost, is to be satisfied in cash and on a euro for euro basis for the EBITDA of CyberGhost for the 12 month period post completion subject to an aggregate cap of €3.0 million.

CyberGhost's Founder and CEO, Robert Knapp, will continue to manage and grow the business under Crossrider's ownership.

Ido Erlichman, Chief Executive Officer of Crossrider, commented:

"The acquisition of CyberGhost is closely aligned with our stated strategy to develop our B2C market reach and we are particularly excited to be able to provide the best in class privacy solutions to millions of users worldwide.

"Crossrider's expansion in the cyber security arena is strategically very significant given its scale and the growth opportunity it presents. We are thrilled to join forces with CyberGhost's highly experienced team and look forward to growing our reach together. This is an exciting step in the development of our business and marks another important milestone in our transformation into a highly scalable, online distribution platform."

Robert Knapp Founder and CEO CyberGhost, commented:

"Crossrider is the perfect partner for CyberGhost - we have ambitions to grow rapidly and we share this spirit with the Crossrider team. Combining CyberGhost's cutting edge Privacy-as-a-Service solution with Crossrider's reach to a wide and carefully targeted audience of potential customers should enable us to scale up quickly as well as bringing significant value to both our employees and clients. We look forward to accelerating our mission to provide all online users with a secure and private internet connection through our market-leading service and now as part of the Crossrider team."

1 - Based on unaudited accounts for calendar year 2016, based on local GAAP and likely to be adjusted when converted to IFRS

2 - Global Mobile VPN Market Size, Share, Development, Growth and Demand Forecast to 2022 - Industry Insights by Industry, by Distribution Channel. Source: P&S Market research (January 2017)

Enquiries:

About Crossrider

Crossrider is an online distribution and digital product company. The Company utilises its proprietary marketing technology platforms to prospect, optimise and monetise mobile and web media, to create a superb user experience. The Company offers improved retention and re-engagement rates, greatly enhancing the value of user activity. Crossrider provides its platforms to its customers for use with their products as well as developing and expanding its own product portfolio. Crossrider's vision is to provide and develop best-in-class digital products for its users globally.

www.crossrider.com

About CyberGhost

Founded in 2011 in Bucharest, Romania, CyberGhost SA is one of the leading VPN suppliers worldwide.

The company consists of 45 employees, a highly skilled development team in Germany and a team of marketing and IT experts in the company's headquarters in Bucharest, Romania. The company aims to provide the best and most effective Internet security measure to its one million and a half monthly active users.

http://www.cyberghostvpn.com