The public parent company of ExpressVPN, Private Internet Access and CyberGhost may soon become a private entity – wholly owned by the current majority shareholder, Unikmind.
The entity, owned by billionaire businessman Teddy Sagi, has offered to purchase all Kape Technologies shares he does not hold and take over the company privately. This offer, valuing Kape at a premium of just over $1.5 billion, comes a year after heavyweight takeover of ExpressVPN in the industry (opens in a new tab) for $936 million.
The offer documentation (opens in a new tab) is huge and says the offer reflects a desire to “hold on [the company’s] expansion’ and to enable ‘long-term capital investment away from public markets’.
“We are committed to further developing Kape within our group of companies, enabling it to leverage operational synergies and access capital for its continued growth, especially as technology convergence gains momentum,” said Sagi.
What does this mean for users?
So what could this move mean for Kape’s seven million subscribers using various VPN and security products?
Unikmind says it “does not intend to make any significant changes to Kape’s operations (except for potential acceleration of inorganic growth), broader strategic plans, or locations and locations of operations.”
The proof will be in the pudding. In particular, we will be looking for Kape-owned VPN brands to continue their publishing activities independent audits (opens in a new tab).
In the Unikmind offer there are several references to “expansion” and “buy and build strategy”, e.g. noting that in the current market “the opportunity to increase the availability of potential acquisitions”.
Between this offer and recent Kape placement news, in which the company talks about securing additional funding to increase Kape’s ability to accelerate growth through acquisitions, Unikmind is clearly signaling its interest in increasing its privacy and security stakes.
Echoes of McAfee
This potential deal comes 11 months after a parallel move in the consumer cybersecurity industry where McAfee was taken private by a group of investors for $14 billion. McAfee reported the take-private deal as an opportunity for a group of investors to “provide financial and operational resources to McAfee to further enhance consumer offerings and capture the rapid growth in consumer demand for digital protection services.”
McAfee has since launched its own McAfee+ a service that combines its antivirus offering with VPN, password manager, identity theft and credit monitoring.
While Kape’s take-private deal is much smaller, it’s clear that the emerging privacy and security opportunities are proving to be tempting for investors.