KAPE.L Regulatory News (KAPE)

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

24 July 2018

Kape Technologies plc

("Kape" or the "Company")

Acquisition of Intego for $16 million

Earnings enhancing acquisition of leading malware protection and cybersecurity SaaS solution

Kape (AIM: KAPE), the consumer security software business, is pleased to announce the acquisition of the entire issued share capital of Neutral Holdings Ltd trading as Intego ("Intego"), a leading Mac and iOS cybersecurity and malware protection SaaS business, for a total consideration of $16.0 million (the "Acquisition"). Kape has acquired Intego from Bessemer Venture Partners.

Intego is focused on the provision of malware protection, firewall, anti-spam, backup, data protection and parental controls software for Mac and is headquartered in Seattle, USA. The Acquisition is expected to be earnings enhancing in the current financial year. In the year to 31 December 2017, Intego generated profit before tax of $1.4 million and significant levels of recurring revenues from subscribers.

The Acquisition is directly in-line with Kape's core strategy to accelerate its growth in the cybersecurity market through select acquisitions, and brings significant strategic benefits to the Company, namely:

· Providing Kape with a strong foothold in the malware protection market and expanding Kape's product portfolio with the addition of complementary malware protection and security solutions;

· Bringing scope to leverage Intego's technology and strong development skills and expertise to expand into additional complementary software solutions;

· Growing the Company's user base by 150,000 paying users, with high renewal rates of above 75%;

· Generating cross-sell opportunities for both Kape's and Intego's solutions across their respective customer bases; and

· Creating levers for growth with Kape's digital marketing expertise expected to accelerate Intego's user acquisition strategy and increase profit margin following integration.

Intego is being acquired for a total consideration of $16.0 million cash, from internal cash resources, to be satisfied on closing of the Acquisition. Intego's senior management team are under a two-year obligation period to the company following completion of the Acquisition.

Ido Erlichman, Chief Executive Officer of Kape, commented:

"The Acquisition presents an exciting opportunity for Kape, as it is highly complementary to our existing solutions. Not only will it broaden our product stack and R&D capabilities, but it expands our user base and further enhances a number of cross-sell opportunities. Furthermore, given Intego's recurring revenue model, we anticipate greater visibility over future earnings, which is a core priority as we transition to a SaaS-based business.

"Historically, Intego's software distribution has been focused mainly on organic growth, which gives us significant scope to grow Intego's user base and profit by leveraging Kape's user acquisition expertise. I look forward to welcoming the Intego team to Kape and continuing to drive the business forward as we progress to the next phase of growth."

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About Kape

Kape is a cybersecurity company focused on helping consumers around the world to have better experience and protection in their digital life. Kape develops and distributes a variety of digital products in the online security space. The Company utilises its proprietary digital distribution technology to optimise its reach and create a superb user experience. Kape offers products which provide online security, privacy and an optimal online experience. Kape's vision is to provide online autonomy for a secure and accessible personal digital life, with team of over 350 people across seven locations worldwide.

www.kape.com