1 Nov 2022 07:00
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
1 November 2022
Kape Technologies plc
("Kape", the "Group" or the "Company")
New Long Term Bank Facility
New facilities support Kape's growth plans and reduce leverage below 1x
Kape (AIM: KAPE), the digital security and privacy software business, announces it has entered into an agreement for new bank facilities with its existing lenders Bank of Ireland, Barclays, Citizens Bank, BNP Paribas, Citi Commercial Bank, and Leumi Bank, and two new banks, HSBC and Credit Suisse, who will join the enlarged syndicate. This new banking facility will replace the existing debt facilities, immediately realising approximately $20 million in net debt reduction, approximately $8 million of savings on financing costs and providing long term financing to support Kape's expansion.
The new debt facilities comprise a $275.0 million senior secured term facility (the "Term Facility"), a $150.0 million revolving credit facility and an uncommitted $75.0 million facility (together the "New Debt Facilities").
The New Debt Facilities will replace all Kape's existing loan facilities, including the deferred consideration facility arrangements put in place with TS Next Level Investments Limited (an affiliate of Unikmind Holdings Limited, the Company's majority shareholder) at the time of the acquisition of ExpressVPN (the "Deferred Consideration Facility").
As well as providing long term financing to better support Kape's ambitious growth plans, the New Debt Facilities will allow Kape to exercise its option under the prepayment agreement, announced on 12 September 2022, to prepay at a discount the $345.0 million of deferred consideration for the acquisition of ExpressVPN. The prepayment is expected to result in an immediate reduction in the Company's net debt of approximately $20.0 million. In addition, the termination of the Deferred Consideration Facility and the associated commitment fee, which accrues at 3.50% per annum, is expected to result in immediate savings of approximately $8.0 million.
The New Debt Facilities have a four-year term. Funding is expected to take place this week. The Term Facility is subject to 10% annual amortisation and carries an opening margin of 2.75pc above the applicable reference rate per annum. The margin will vary over the term of the facilities based on the Group's adjusted leverage each quarter.
Following the refinancing, the Group's adjusted leverage expected by the end of 2022 will be below 1x.
Oded Baskind, Chief Financial Officer of Kape, commented:
"We are pleased to have received such strong support from our existing partners Bank of Ireland, Barclays, Citizens Bank, BNP Paribas, Citi Commercial Bank, and Leumi Bank, as well as the new banks joining the syndicate, HSBC and Credit Suisse; this is a strong vote of confidence in Kape's management, business model and growth trajectory.
The New Debt Facilities will provide the business with long term financing, transforming Kape's ability to further support our ambitious growth plans as well as immediately realise approximately $20.0 million in net debt reduction and approximately $8.0 million of savings on financing costs. The New Debt Facilities will also provide additional firepower to continue our profitable growth path in the digital privacy and security space."
Enquiries:
Kape Technologies plc Ido Erlichman, Chief Executive Officer Oded Baskind, Chief Financial Officer | via Vigo Consulting |
Shore Capital (Nominated Adviser & Broker) Toby Gibbs / Mark Percy / James Thomas / Iain Sexton | +44 (0)20 7408 4090 |
Stifel Nicolaus Europe Limited (Joint Broker) Alex Price / Brad Topchik / Alain Dobkin / Richard Short | +44 (0) 20 7710 7600 |
Vigo Consulting (Financial Public Relations) Jeremy Garcia / Kendall Hill kape@vigoconsulting.com | +44 (0)20 7390 0237 |
This announcement relates to the disclosure of information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.
About Kape
Kape is a leading 'privacy-first' digital security software provider to consumers. Through its range of privacy and security products, Kape focuses on protecting consumers and their personal data as they go about their daily digital lives.
Kape has over 7 million paying subscribers, supported by a team of over 1,000 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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