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BUCHAREST (Romania), March 14 (SeeNews) - Israeli online distribution and digital product company Crossrider said on Tuesday it has acquired cyber security software-as-a service (SaaS) provider Romanian company CyberGhost for a total of 9.2 million euro ($9.8 million).
The acquisition is expected to be earnings enhancing in the current financial year, Crossrider said in a press release.
The deal is in line with the Crossrider's strategy to broaden its product offering to service high growth consumer markets, of which cyber security is a key vertical, it added.
Moreover, the deal brings significant strategic benefits to Crossrider, namely: expanding its footprint in the high growth cyber security market, increasing its user base and delivering an average of 145,000 paying subscribers per month, with a low churn rate and some 1.5 million active users per month.
By integrating CyberGhost in its business, Crossrider expects to accelerate its current sales pipeline whilst also improving operating margin.
"The acquisition of CyberGhost is closely aligned with our stated strategy to develop our B2C market reach and we are particularly excited to be able to provide the best in class privacy solutions to millions of users worldwide," Crossrider's CEO Ido Erlichman said.
The global market of virtual private network (VPN) solutions is growing rapidly with the usage of mobile VPN in particular continuing to increase with projected compound annual growth rate (CAGR) of 21% for 2017-2022, according to the press release.
CyberGhost's founder and CEO, Robert Knapp, will continue to manage and grow the business under Crossrider's ownership.
"This is an exciting step in the development of our business and marks another important milestone in our transformation into a highly scalable, online distribution platform," Robert Knapp said.
Crossrider was founded in 2011 in Israel and is currently an Isle of Man-based online distribution and digital product company. It uses its proprietary marketing technology platforms to prospect, optimise and monetise mobile and web media. In September 2014, Crossrider has listed on the London Stock Exchange, raising £45.9 million ($56 million/ 52.5 million euro) in a successfully oversubscribed IPO.
At the beginning of 2017, Crossrider founded an innovative start-up hub in Bucharest, similar to an already existing one in Tel Aviv.
Founded in 2011 in Bucharest, CyberGhost has some 45 employees - a development team in Germany and a team of marketing and IT experts in the company's headquarters in the Romanian capital.
Its solution focuses on safeguarding personal information when browsing the Internet through unsecured mobile hotspot and its customer base growth is mainly due to the growing concerns around data security and safety. In the year to 31 December 2016, CyberGhost generated EBITDA of $1 million and significant levels of recurring revenues from subscribers.