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.