KAPE.L Regulatory News (KAPE)

15 December 2021

Kape Technologies plc

("Kape" or the "Group")

Completion of ExpressVPN Acquisition;

Issue of Equity; and Business Update

· Revenues expected to be at the upper end of the US$197-202 million range with Adjusted EBITDA of between US$73-$76 million for FY 2021

· Substantial paying subscriber growth in enlarged group to over 6.5 million

· Kape's lender group has given its consent to the Acquisition; extended revolving credit facility to US$80 million

· Acquisition anticipated to be highly earnings accretive - approximately 28% - with FY 2022 guidance of revenue of between US$610-624 million and Adjusted EBITDA2 of between US$166-172 million

Kape (AIM: KAPE), the digital security and privacy software business, is pleased to confirm that completion of the acquisition of ExpressVPN for a total consideration of approximately US$9361 million (the "Acquisition") is expected to occur on 16 December 2021. Further details of the Acquisition are contained in Kape's announcement made on 13 September 2021.

ExpressVPN is one of the most recognised brands in the digital privacy space and the Acquisition creates a premium digital privacy and security player best-positioned to serve the growing demand for digital privacy.

The Acquisition delivers substantial operational benefits to Kape. The enlarged group will have significant scale, servicing over 6.5 million paying subscribers, having achieved substantial growth since the date of signing. With an average aggregated retention rate of 82%3, presenting considerable cross-sell and additional revenue opportunities throughout the platform. In addition, ExpressVPN's first-rate management and c. 290 team members are joining Kape, bringing deep expertise in the digital privacy sphere. ExpressVPN also brings a robust network of channel partners, further strengthening the enlarged group's go-to-market capabilities.

The Acquisition is anticipated to be highly earnings enhancing, with the enlarged group expected to generate revenues for the year ended 31 December 2022 of between US$610-624 million and Adjusted EBITDA2 of between US$166-172 million, with earnings accretion of approximately 28%.

Kape's lender group, comprised of Bank of Ireland, Barclays Bank PLC, Citi Commercial Bank, Citizens Bank, BNP Paribas and Leumi Bank, has given its consent to the Acquisition and extended their revolving credit facility to Kape from US$10 million to US$80 million.

The Group continues to trade in-line with management expectations for the current financial year, with revenues expected to be at the upper end of the US$197-202 million range and Adjusted EBITDA of between US$73-$76 million for the year ended 31 December 2021, excluding the contribution of ExpressVPN.

Ido Erlichman, Chief Executive Officer of Kape, commented:

"This game-changing partnership will transform our business, creating a leading pure-play consumer-focused company with a mission to safeguard consumers' digital lives.

"Our over six and a half million customers - and growing - choose Kape's products every single day, and we are uniquely positioned to generate value in this fast-growing space.

"We are looking forward to working with ExpressVPN's management and the wider team to provide the most trusted solutions supporting digital freedom and security globally."

Issue of Equity & Total Voting Rights

As announced on 13 September 2021, as part of the consideration for the Acquisition, Kape is issuing 47,782,800 new ordinary shares in the Company to the vendors of ExpressVPN (the "Consideration Shares"). Application has been made for the Consideration Shares to be admitted to trading on the AIM market of the London Stock Exchange ("AIM") and it is expected that admission will take place and trading in the Consideration Shares will commence from 8:00am on 16 December 2021 ("Admission").

Following Admission, the total number of voting rights in Kape will be 349,084,840, which is the figure which should be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, ordinary shares in the company ("Ordinary Shares") under the FCA's Disclosure and Transparency Rules.

The Company holds 9,662,654 Ordinary Shares in treasury, the voting rights to which have been waived. Therefore, following Admission, the Company's issued share capital will consist of 358,747,494 Ordinary Shares.

Bonus Award

In connection with completion of the transformational acquisitions during 2021 of ExpressVPN and Webselenese, the Kape Remuneration Committee has approved an exceptional bonus award of US$1.4 million to Ido Erlichman (CEO) and US$1.0 million to Moran Laufer (CFO) (the "Acquisitions Bonus"). Each Acquisitions Bonus is subject to clawback of up to 20% of the award, if certain integration targets, scheduled to be completed during 2022, are not met.

The grant of the Acquisitions Bonus is a related party transaction under Rule 13 of the AIM Rules for Companies. The Directors of the Company, excluding Ido Erlichman and Moran Laufer, consider, having consulted the Company's Nominated Adviser, Shore Capital & Corporate Limited, that the terms of the related party transaction are fair and reasonable insofar as the Company's shareholders are concerned.

1 Based on the closing share price prior to the acquisition signing date.US$ figures based on an assumed GBP/USD exchange rate of US$1.38, being the rate prior to the acquisition signing date.

2 Adjusted EBITDA is a non-GAAP measure and a company specific measure which excludes other operating income and expenses which are considered to be one off and non-recurring in nature.

3As of 30 June 2021 on a six-month basis.

Enquiries:

About Kape

Kape is a leading 'privacy-first' digital security software provider to consumers. Through its range of privacy and security products, Kape focusses on protecting consumers and their personal data as they go about their daily digital lives.

On completion of the Acquisition, Kape will have over 6.5 million paying subscribers, supported by a team of over 730 people across ten locations worldwide. Kape has a proven track record of revenue and EBITDA growth, underpinned by a strong business model which leverages our digital marketing expertise.

Through its subscription-based platform, Kape has fast established a highly scalable SaaS-based operating model, geared towards capitalising on the vast global consumer digital privacy market.

www.kape.com

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