Kape Technologies Share Discussion Threads

[johndoe23] 20/11/2019 08:25

I know, crazy.

[fft] 20/11/2019 08:24

Very odd this early substained selling.Find it hard to believe that either a. People who bought yesterday made so much yesterday they are selling this today, or stop losses from yesterday are kicking in already.

[rimau1] 20/11/2019 07:49

Our CFO must have had his finger on the trigger at 7.59am to achieve 90p yesterday! On the ball and good reflexes, excellent signs...

[johndoe23] 20/11/2019 07:37

Excellent sign! With ST coverage to come in IC later, maybe another nice rise today...

[rivaldo] 20/11/2019 07:09

Encouraging to see an NED buy a substantial amount of shares at 102p - and to see the CFO also splashing out £22k, which is a good sign:

[john09] 19/11/2019 19:18

I’m expecting the share price to rise substantially again tomorrow with some press coverage

[igoe104] 19/11/2019 14:04

Substantial deal both transformational and significantly earnings enhancing.

In a deal which will have a profound effect on the prospects for the group, Kape has announced the proposed acquisition of LTMI Holdings, the holding company for virtual private network provider Private Internet Access (PIA). PIA is a Denver-based security software business, the addition of which will transform the size of Kape by doubling group revenues (including a stronger recurring revenue base) and increasing adjusted EBITDA by around 2.5 times in FY 2020E. Reflecting that, our earnings estimates increase by around 90% for FY 2020E while our new FY 2021E estimates build strongly on that much larger base. Total consideration is c. US$95.5 million with an enterprise value of c. US$127.6 million. The deal is expected to complete within 45 days and is anticipated to be immediately earnings enhancing. The transaction will create a significant player in the digital privacy market and will enable Kape to expand its footprint in North America with a broader product offering.

Kape will acquire LTMI’s suite of digital privacy products which have built a strong position in data privacy services with over 1 million paying customers, 48% of whom are in the US. PIA is focused solely on paid subscribers which will substantially increase Kape’s recurring revenues.

Kape will acquire LTMI from its co-founders Andrew Lee and Steve DeProspero, for a total consideration of c.US$95.5 comprising c.US$52.9 million cash and c.42,701,548 new Kape ordinary shares. It will be paid in three phases with the cash element and repayment of LTMI’s debt funded through a new US$40 million loan facility and existing resources.

The announcement anticipates that the enlarged group will generate consolidated proforma 2020 revenues of US$120-123 million and Adjusted EBITDA of US$35-38 million with mooted annual cost synergies of US$3.5-4.5 million expected to be achieved within 12 months of completion. Management anticipates around 90% earnings accretion in FY 2020E.

LTMI is expected to add to the cash generation of the existing Kape business having generated around US$16.3 million of adjusted operational cash flow in 2018 with cash conversion of over 100%.

This is a highly significant and transformational deal for Kape which we believe will accelerate its strategy and transport its quest to become a world leader in digital privacy to a new level. It will benefit from a significantly enhanced pool of R&D talent with the addition of PIA’s market-leading development team.

[tomps2] 19/11/2019 12:08

KAPE webinar:

Here's Ido Erlichman CEO outlining the proposed acquisition of Private Internet Access



- earnings enhancing
- cost synergies
- accelerates product innovation capabilities

[podgyted] 19/11/2019 11:51

Kape Presentation

[johndoe23] 19/11/2019 11:46

When ST covers this, and other new investors cotton on to the excellent opportunity here, this could easily hit 120p by Friday...

[cheshire man] 19/11/2019 11:18

Proactive

@proactive_UK


Kape turns privacy crusader with purchase of VPN provider PIA
The acquisition is expected to double Kape’s paying subscribers and increase 2020 earnings by 90%



PIA is a major VPN service provider


Kape Technologies PLC’s (LON:KAPE) shares flew higher as the company was poised to double its subscribers by acquiring the owner of virtual private network (VPN) operator Private Internet Access (PIA) for US$95.5mln.

The acquisition of the US-based digital privacy specialist will bring more than 1mln paying customers, with high retention rates, which will double the London-listed security software firm’s client base.

Kape, which will adopt the PIA name on completion, said it expects the addition to boost its 2020 earnings by 90%, with predicted annual cost synergies of between US$3.5mln and US$4.5mln a year after completion, which is pencilled in for early 2020.

“The acquisition has immediate and important benefits – doubling Kape’s customer base from day one, to over 2mln paying subscribers globally, with almost half based in the US, and positioning the group as a global leader within the fast-growing digital privacy sector,” analysts at house broker Shore Capital said in a note.
Shares in Kape were up 34% to 103.51p on Tuesday morning.
Quick facts: Kape Technologies PLC
Price: 104 GBX
LSE:KAPE
Market:
LSE
Market Cap:
£154.45 m

[rivaldo] 19/11/2019 11:02

KAPE's share price reached 130p or so based purely on the current business - and that was before the acquisition of ZenMate, let alone today's game-changing news.

Which just shows how far the share price has fallen for no real reason, and how much upside there is.

[essential] 19/11/2019 09:19

Bought. Ack into these at the close. Potentially business transforming news

[deanowls] 19/11/2019 09:16

I’d argue the sellers are leaving the ship at the moment and that once the figures are analyses we will see a wave of new buyers which puts a floor in the price.

You pays your money.

[johndoe23] 19/11/2019 09:14

Yes, sellers bound to take over at some point. Looking for a more suitable in...

[rivaldo] 19/11/2019 09:02

The 18.4c EPS includes the new shares.

The beauty of this is deal of course that it's so earnings-enhancing as a large part of the consideration is in cash (and the equity is only issued in stages too).

[pimsim] 19/11/2019 08:44

rivaldo, do you know if that 18.4c EPS next year is before or after the dilution from 42.7m new shares?

[qs99] 19/11/2019 08:43

Wow, what a deal. Maybe this gets KAPE on the insti radar? if so, then a re-rating over 2020 could be on the cards IMO....which with a decent rating and EPS as highlighted on this thread, could see it north of £2.....obviously they have to deliver, but you get the drift....am in for the ride...>DYOR

[easwarareddy] 19/11/2019 08:40

L2 showing sells starting to take hold. Out for now. Buy back later

[johndoe23] 19/11/2019 08:39

Wow. Superb news and what an early rise!!Pondering a top up with ST coverage surely later...which will propel this higher!

[easwarareddy] 19/11/2019 08:36

Spike? Hm might sell soon n buy back in

[igoe104] 19/11/2019 08:28

Hopefully it will now move up and beyond £1.20 over the next couple of days, with magazine and press releases etc.