RECOMMENDED CASH OFFER for MARIADB plc by MERIDIAN BIDCO LLC which is an Affiliate of K1 INVESTMENT MANAGEMENT, LLC as manager of K5 PRIVATE INVESTORS, L.P.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

THIS ANNOUNCEMENT IS BEING MADE PURSUANT TO RULE 2.7 OF THE IRISH TAKEOVER RULES 

MANHATTAN BEACH, Calif., April 24, 2024 /PRNewswire/ — K1 Investment Management, LLC (“K1“) is pleased to announce the terms of a recommended cash offer to be made by Meridian Bidco LLC (“Bidco“), a newly formed Affiliate of K1, as manager of K5 Private Investors, L.P. (“K5“), to acquire the entire issued and to be issued share capital of MariaDB plc (“MariaDB“).

Summary

• Under the terms of the Offer, MariaDB Shareholders will be entitled to receive:

for each MariaDB Share                        $ 0.55 in cash               (the Cash Offer)

• The Cash Offer values the entire issued share capital of MariaDB (on a fully diluted basis) at approximately $39.5m.
• The Cash Consideration represents a premium of approximately:
  • 189% to MariaDB’s closing share price of $0.19 on 5 February 2024 (being the last full trading day prior to the announcement by MariaDB of a forbearance agreement with RP Ventures LLC);
  • 57% to MariaDB’s closing share price of $0.35 on 15 February 2024 (being the last date prior to the publication of K1’s Possible Offer Announcement);
  • 129% to MariaDB’s average closing share price of $0.24 over the 30 trading day period ending 15 February 2024; and
  • 90% to MariaDB’s average closing share price of $0.29 over the 60 trading day period ending 15 February 2024.
• As an alternative to the Cash Offer, Eligible MariaDB Shareholders may elect, in respect of all (but not some) of their MariaDB Shares, to receive, in lieu of the Cash Offer to which they are otherwise entitled, one unlisted, unregistered non-voting Class B unit of Meridian Topco LLC (“Topco“) (a limited liability company formed in Delaware, an Affiliate of K1 and parent of Bidco) (each, a “Topco Rollover Unit“) for each MariaDB Share (the “Unlisted Unit Alternative”), with such Topco Rollover Units to be issued on the terms and pursuant to the mechanism described in paragraphs 14 and 15 of the main body of this Announcement.  In aggregate, the maximum number of Topco Rollover Units available to be issued to Eligible MariaDB Shareholders under the Unlisted Unit Alternative is limited to 15% of Topco’s fully diluted share capital (after issuance of all Topco Rollover Units to all Electing Shareholders) (the “Rollover Threshold“). The key terms of the Unlisted Unit Alternative are summarised in paragraph 15 of the main body of this Announcement. Further details regarding Topco and the rights of the Topco Rollover Units are set out in paragraphs 15 and 16 of the main body of this Announcement and will be more fully set out in the Offer Document.

  The Topco Rollover Units will not be listed or registered under US securities laws, will not be transferable (subject to certain limited exceptions), will be non-voting (other than those non-waivable voting rights, if any, required pursuant to applicable Delaware law), will have limited information rights (except for certain limited information to be provided to holders of the Topco Rollover Units to be more fully described in the Offer Document and certain other financial information regarding Topco as the holders of Topco Rollover Units may reasonably request in writing from time to time (but no more frequently than annually)), and may be subject to dilution pursuant to any further issue of securities by Topco. For the purposes of Rule 24.11 of the Irish Takeover Rules, an appropriate advisor will provide an estimate of the value of a Topco Rollover Unit, together with the assumptions, qualifications and caveats forming the basis of its estimate of value, in a letter to be included in the Offer Document.

• If the aggregate number of Topco Rollover Units to be issued to all Electing Shareholders exceeds the Rollover Threshold then each Electing Shareholder’s number of Topco Rollover Units to which they would otherwise have been entitled will be reduced on a pro-rated basis (based on the relative holdings of MariaDB Shares as of immediately prior to the Initial Closing Date (as defined in Appendix I of this Announcement) of all of the Electing Shareholders), and the consideration for each MariaDB Share that is not exchanged for Topco Rollover Units will be paid in cash in accordance with the terms of the Cash Offer.

• Bidco may in its sole discretion, withdraw the Unlisted Unit Alternative if there are any Electing Shareholders whose election to receive the Unlisted Unit Alternative will require registration of the Topco Rollover Units under US securities law (and there is not an applicable exemption for each such Electing Shareholder) (the “Rollover Withdrawal Right”). In the event Bidco exercises its Rollover Withdrawal Right, the Unlisted Unit Alternative will lapse, no Topco Rollover Units will be issued and the consideration payable in respect of each tendered MariaDB Share will be settled in cash in accordance with the terms of the Cash Offer. The Offer will be open for at least 10 business days after the announcement of Bidco’s exercise of its Rollover Withdrawal Right.  For the avoidance of doubt, the exercise by Bidco of the Rollover Withdrawal Right shall not otherwise affect any validly received tenders, nor shall it constitute a variation of the Offer.

• Unless otherwise determined by Bidco or K1 or required by the Irish Takeover Rules, and permitted by applicable law and regulation, the Unlisted Unit Alternative is not being offered, sold or delivered, directly or indirectly, in or into any Restricted Jurisdiction (and so MariaDB Shareholders in such jurisdictions will not be eligible to elect to receive the Unlisted Unit Alternative).

• In addition, MariaDB Shareholders who wish to elect for the Unlisted Unit Alternative will be required to provide certain “Know Your Client” information as requested by Topco and K1. Further details regarding this eligibility requirement will be set out in the Offer Document. Failure to provide the required information will result in elections to receive the Unlisted Unit Alternative being invalid and Eligible MariaDB Shareholders who made such an invalid election will instead receive the Cash Consideration for the number of MariaDB Shares in respect of which they purported to make an election to receive the Unlisted Unit Alternative.

• If any dividend or other distribution is authorised, declared, made or paid in respect of MariaDB Shares on or after the date of this Announcement, K1 and Bidco reserve the right to reduce the consideration due pursuant to the Cash Offer (and, as the case may be, the consideration due under the Unlisted Unit Alternative) by the aggregate amount of such dividend or other distribution or return of value. In such circumstances, MariaDB Shareholders shall be entitled to retain any such dividend, distribution, or other return of value authorised, declared, made or paid.
• Commenting on the Offer, Sujit Banerjee, Managing Director of K1 Operations, LLC, said:

“We are pleased about the progress MariaDB has made and the innovative solutions they bring to the market. Partnering with MariaDB presents an attractive opportunity to drive further growth and innovation in the database management space.”

Recommendation – Cash Offer

• The MariaDB Board has, as required under the Irish Takeover Rules, due to conflicts of interest, recused itself from taking part in the formulation and communication of advice on the Offer to MariaDB Shareholders. Instead, IBI Corporate Finance, which has been appointed as independent financial advisor to MariaDB under Rule 3 of the Irish Takeover Rules, has, in that capacity, taken responsibility for considering the Offer and formulating an appropriate recommendation to be made to MariaDB Shareholders.
• It is, in the context of the background to and reasons for recommending the Cash Offer, which are set out in paragraph 5 of the main body of this Announcement that IBI Corporate Finance has concluded that the terms of the Cash Offer are fair and reasonable and it would recommend that MariaDB Shareholders should accept the Cash Offer. Further detail will be included in the Offer Document or in a separate circular to be sent to MariaDB Shareholders by MariaDB.

No Recommendation – Unlisted Unit Alternative

• IBI Corporate Finance is unable to advise as to whether or not the financial terms of the Unlisted Unit Alternative are fair and reasonable. This is because IBI Corporate Finance has not had any involvement in the development and validation of any financial projections for Topco. As a result, IBI Corporate Finance is unable to assess any plans Topco may have for the development of MariaDB or the Topco Group to the degree necessary to form an assessment of the value of the Unlisted Unit Alternative. IBI Corporate Finance also note the significant and variable impact that the disadvantages and advantages of the Unlisted Unit Alternative (certain of which are outlined below and in paragraph 16 of the main body of this Announcement) may have for individual Eligible MariaDB Shareholders. In terms of the advantages, these include, in particular, the ability to participate in potential future value creation of the MariaDB Group. In terms of the disadvantages, these include, in particular, (a) the level of uncertainty as to the future value of Topco Rollover Units, which will depend on the performance of the MariaDB Group over a number of years and which performance will be impacted by, amongst other things, the business plan and strategy of the business under Topco’s control; and (b) the terms of the Topco Rollover Units including the fact that they will be illiquid and non-transferable, will be subject to potential dilution in the event that additional securities are issued by Topco, will not carry voting rights, and will have limited information rights (except for certain limited information to be provided to holders of the Topco Rollover Units to be more fully described in the Offer Document and certain other financial information regarding Topco as the holders of Topco Rollover Units may reasonably request in writing from time to time (but no more frequently than annually)).
• Accordingly, IBI Corporate Finance is unable to form an opinion as to whether or not the terms of the Unlisted Unit Alternative are fair and reasonable and is not making any recommendation to Eligible MariaDB Shareholders as to whether or not they should elect to receive the Unlisted Unit Alternative.
• In addition, the attention of Eligible MariaDB Shareholders who may be considering electing to receive the Unlisted Unit Alternative is drawn to certain risk factors and other investment considerations relevant to such an election. These will be set out in full in the Offer Document and include, inter alia, the following:

  Disadvantages of electing to receive the Unlisted Unit Alternative:

  (a) upon the Effective Date, Topco will be solely controlled by K5, who will exercise all decision-making powers relating to Topco and its Subsidiaries (including all members of the MariaDB Group) and the businesses thereof. Holders of the Topco Rollover Units, which will not carry any voting rights (other than those non-waivable voting rights, if any, required pursuant to applicable Delaware law) or rights to appoint (or vote for the appointment of) directors, officers or other control persons of Topco, will therefore have no influence over decisions made by Topco in relation to its investment in MariaDB or in any other business;

  (b) the Topco Rollover Units will be unquoted and will not be listed or admitted to trading on any exchange or market for the trading of securities, and will therefore be illiquid. In addition, the Topco Rollover Units will not be registered under US securities laws;

  (c) the Topco Rollover Units will be non-transferable, other than with the prior written consent of K5 (and then only in K5’s sole and absolute discretion). The future monetisation of the Topco Rollover Units therefore remains entirely in the discretion of K5, subject to a customary “tag-along” right for Topco Rollover Units to be more fully described in the Offer Document;

  (d) the value of the Topco Rollover Units will at all times be uncertain and there can be no assurance that any such securities will be capable of being sold in the future or that they will be capable of being sold at the value to be estimated by an appropriate advisor in the Offer Document;

  (e) the Topco Rollover Units will be subject to a customary “drag-along” right. As a result,  given its sole control over Topco (as described in paragraph (a), above), K5 will have sole and absolute discretion to “drag” the holders of Topco Rollover Units, at any time, into a future sale or change of control transaction involving Topco or any of its Subsidiaries (including MariaDB) and require such holders to sell or transfer their Topco Rollover Units, and K5 will therefore control the future monetisation of the Topco Rollover Units;

  (f) K5 will control the timing of distributions, dividends and payments of capital proceeds (in each case, if any) to the holders of Topco Rollover Units. There is no guarantee that Topco will make any such distributions, dividends or payments of capital proceeds at any time ((however, Topco Rollover Units will rank pari passu with Class A Topco Units in respect of any such distributions, dividends or payments of capital proceeds that are made);

  (g) Topco Rollover Units will carry no pre-emption rights and any participation by the holders of Topco Rollover Units in future issues of securities by the Topco Group will be at the discretion of K5 and also be subject to other important exceptions and risk. For example:

(i) holders of Topco Rollover Units will not be entitled to participate in any issues of securities to actual or potential employees, directors, officers or consultants of the Topco Group (whether of the same or different classes to the Topco Rollover Units);

(ii) if Topco introduces one or more management incentive plans for actual or potential employees, directors, officers and consultants of the Topco Group after the Effective Date that provide participants with an interest in securities in the Topco Group, such issue(s) could potentially significantly dilute the equity interests in Topco of the holders of Topco Rollover Units. In addition, the Topco Group may not receive material cash sums on the issue of any such securities and the returns on any such securities may potentially be structured to increase their proportionate interest in the value of the Topco Group as it increases in value (whether pursuant to a ratchet mechanism or otherwise); and

(iii) the holders of Topco Rollover Units will have no legal entitlement to participate in issues of securities by the Topco Group in any case, including in consideration for, or in connection with, its acquisition of other assets, companies or all or part of any other businesses or undertakings; 

(h) the holders of Topco Rollover Units will enjoy only limited minority protections and other rights to be more fully described in the Offer Document;

(i) K5 may freely dispose of some or all of its Class A Topco Units, meaning that the holders of Topco Rollover Units may find themselves owning units in Topco alongside different owners. The Topco Rollover Units will benefit from a “tag-along” right (as noted above and to be more fully described in the Offer Document), but K5 will be able to dispose of some or all of its Class A Topco Units without triggering this tag-along right;

(j) individual holders of Topco Rollover Units will have very limited control over the date(s) on and value(s) at which they may be able to realise their investment in the Topco Group;

(k) holders of Topco Rollover Units will have no opportunity to convert their Topco Rollover Units into Class A Topco Units;

(l) the MariaDB Shares are currently admitted to trading on NYSE and MariaDB Shareholders are afforded certain standards and protections, including in respect of disclosure. As a result. MariaDB Shareholders who receive Topco Rollover Units (being unlisted, unregistered securities in a private company) will not be afforded protections commensurate with those that they currently benefit from as shareholders in MariaDB, including because Topco intends to rely on an exemption from registration under US securities laws and will therefore not be registering the Topco Rollover Units with the SEC. Except for certain limited information to be provided to holders of the Topco Rollover Units to be more fully described in the Offer Document and certain other financial information regarding Topco as the holders of Topco Rollover Units may reasonably request in writing from time to time (but no more frequently than annually), Topco’s LLC Agreement will not provide holders of Topco Rollover Units with information rights;

(m) there can be no certainty or guarantee as to the performance of the Topco Group or the MariaDB Group following the Effective Date, and past performance cannot be relied upon as an indication of future performance or growth;

(n) there is no certainty as to the number of MariaDB Shareholders that will accept the Offer and therefore Topco may hold less than all of the MariaDB Shares following the Initial Closing Date and which, therefore, could impact the value of Topco’s assets; and

(o) MariaDB Shareholders will have no certainty as to the amount of Topco Rollover Units they would receive because:

(i) the maximum number of Topco Rollover Units available to MariaDB Shareholders under the Unlisted Unit Alternative will be limited to the Rollover Threshold; and

(ii) to the extent that elections for the Unlisted Unit Alternative cannot be satisfied in full, the number of Topco Rollover Units to be issued to each eligible MariaDB Shareholder who has elected for the Unlisted Unit Alternative will be reduced on a pro rata basis, and the consideration for each MariaDB Share that is not exchanged for Topco Rollover Units will be paid in cash in accordance with the terms of the Cash Offer.

Advantages of electing to receive the Unlisted Unit Alternative:

(a) the Unlisted Unit Alternative allows Eligible MariaDB Shareholders to invest directly in Topco providing continued indirect economic exposure to MariaDB under private ownership; and

(b) from completion of the Offer, the Topco Rollover Units will rank economically pari passu with the investment in Topco by K5, and will carry a pro rata entitlement to dividends, distributions and returns of capital.

• MariaDB Shareholders are encouraged to take into account the risk factors and other investment considerations outlined above in relation to the Unlisted Unit Alternative, as well as their particular circumstances, when deciding whether to elect to receive the Unlisted Unit Alternative in respect of all of their holding in MariaDB Shares.  MariaDB Shareholders should also ascertain whether acquiring or holding Topco Rollover Units is permitted or affected by the laws of the jurisdiction in which they reside and consider whether Topco Rollover Units are a suitable investment in light of their own personal circumstances. Accordingly, MariaDB Shareholders are strongly recommended to seek their own independent financial, tax and legal advice in light of their own particular circumstances and investment objectives before deciding whether to elect to receive the Unlisted Unit Alternative. Any decision to elect to receive the Unlisted Unit Alternative should be based on any such independent financial, tax and legal advice and full consideration of the information in this Announcement and the Offer Document (when published).

Irrevocable undertakings

• K1, K5, Topco and Bidco have received irrevocable undertakings to accept the Offer from each of the parties listed at paragraph 11 of the main body of this Announcement in respect of, in aggregate, 34,912,697 MariaDB Shares, representing in aggregate approximately 51.53% of the existing issued share capital of MariaDB as at 22 April 2024 (being the latest practicable date prior to the release of this Announcement). These undertakings continue to be binding in the event of a competing offer for MariaDB.

This summary should be read in conjunction with the full text of the following Announcement and its appendices. The Conditions to, and certain further terms of, the Offer are set out in Appendix I to this Announcement and the full terms and Conditions will be set out in the document to be despatched to MariaDB Shareholders (the “Offer Document”). Appendix II to this Announcement contains further details of the sources of information and bases of calculation set out in this Announcement. Certain terms used in this Announcement are defined in Appendix III to this Announcement.

Kirkland & Ellis LLP and A&L Goodbody LLP are acting as legal advisers to K1 and Bidco.

Important Notices

The K1 Responsible Persons (being the investment committee of K1), the Bidco Officers and the Topco Officers accept responsibility for the information contained in this Announcement other than information for which the sole director of MariaDB accepts responsibility and the IBI Recommendation. Jürgen Ingels, being the sole director on the MariaDB Board at the time of this Announcement, accepts responsibility for the information contained in this Announcement relating to MariaDB and IBI Corporate Finance accepts responsibility for the IBI Recommendation. To the best of the knowledge and belief of the K1 Responsible Persons, the Bidco Officers, the Topco Officers, Jürgen Ingels (being the sole director on the MariaDB Board at the time of this Announcement) and IBI Corporate Finance (who have taken all reasonable care to ensure that such is the case) the information contained in this Announcement for which they have accepted responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

Lazard Frères & Co. LLC, together with its affiliate Lazard & Co., Limited (which is authorised and regulated in the United Kingdom by the Financial Conduct Authority) (“Lazard“), is acting exclusively as financial adviser to K1 and Bidco and no one else in connection with the Offer and will not be responsible to anyone other than K1 and Bidco for providing the protections afforded to clients of Lazard nor for providing advice in relation to the Offer or any other matters referred to in this Announcement. Neither Lazard nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard in connection with this Announcement, any statement contained herein or otherwise.

IBI Corporate Finance Limited (“IBI Corporate Finance“), is acting exclusively as financial adviser to MariaDB and no one else in connection with the Offer and will not be responsible to anyone other than MariaDB for providing the protections afforded to clients of IBI Corporate Finance nor for providing advice in relation to the Offer or any other matters referred to in this Announcement. Neither IBI Corporate Finance nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of IBI Corporate Finance in connection with this Announcement, any statement contained herein or otherwise.

This Announcement does not constitute an offer to sell or invitation to purchase any securities, or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. In particular, this Announcement is not an offer of securities for sale into the United States. No offer of securities shall be made in the United States absent registration under the Securities Act of 1933, as amended, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements. The release, publication or distribution of this Announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this Announcement is released, published or distributed should inform themselves about and observe such restrictions.

The Offer will be made solely by means of the Offer Document, which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Any decision in respect of, or other response to, the Offer, should be made only on the basis of the information contained in the Offer Document. MariaDB Shareholders should carefully read the Offer Document in its entirety before making a decision with respect to the Offer. Each MariaDB Shareholder is urged to consult its independent professional adviser immediately regarding the tax consequences to it (or its beneficial owners) of the Offer.

The Offer Document containing further details of the Offer (including the form of acceptance) will be despatched to MariaDB Shareholders as soon as reasonably practicable, subject to the Irish Takeover Rules and, in any event, (save with the consent of the Irish Takeover Panel) within 28 days of the date of this Announcement.

This Announcement does not constitute a prospectus or a prospectus equivalent document.

This Announcement has been prepared for the purpose of complying with the laws of Ireland and the Irish Takeover Rules and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside of Ireland.

If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or from an appropriately authorised independent financial adviser.

Cautionary statement regarding forward looking statements

This document (including information incorporated by reference in this document), oral statements made regarding the Offer, and other information published by MariaDB, K1 or any member of the K1 Group contain statements which are, or may be deemed to be, “forward looking statements”. Such forward looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and on numerous assumptions regarding the business strategies and the environment in which any member of the K1 Group (including, after closing of the Offer, any member of the MariaDB Group) shall operate in the future and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. The forward looking statements contained in this document relate to K1, any member of the K1 Group’s (including, after closing of the Offer, any member of the MariaDB Group) future prospects, developments and business strategies, the expected timing and scope of the Offer and other statements other than historical facts. In some cases, these forward looking statements can be identified by the use of forward looking terminology, including the terms “believes”, “estimates”, “will look to”, “would look to”, “plans”, “prepares”, “anticipates”, “expects”, “is expected to”, “is subject to”, “intends”, “may”, “will”, “shall” or “should” or their negatives or other variations or comparable terminology. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that shall occur in the future. These events and circumstances include changes in global, political, economic, business, competitive, and market conditions and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or disposals. If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions prove incorrect, actual results may differ materially from those expected, estimated or projected. Such forward looking statements should therefore be construed in the light of such factors.

Neither K1 nor any member of the K1 Group, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in this document shall actually occur. Given these risks and uncertainties, potential investors, including those investors electing to receive the Unlisted Unit Alternative, should not place any reliance on forward looking statements. The forward looking statements speak only as of the date of this document. All subsequent oral or written forward looking statements attributable to any member of the K1 Group, or any of their respective associates, directors, officers, employees or advisers, are expressly qualified in their entirety by the cautionary statement above. K1 and the K1 Group expressly disclaim any obligation to update such statements other than as required by law or by the rules of any competent regulatory authority, whether as a result of new information, future events or otherwise.

Disclosure requirements of the Irish Takeover Rules

Under Rule 8.3(b) of the Irish Takeover Rules, if any person is, or becomes, ‘interested’ (directly or indirectly) in 1% or more of any class of ‘relevant securities’ of MariaDB, all ‘dealings’ in any ‘relevant securities’ of MariaDB or any securities exchange offeror (including by means of an option in respect of, or a derivative referenced to, any such ‘relevant securities’) must be publicly disclosed by not later than 3:30 pm (U.S. Eastern Time) on the ‘business day’ following the date of the relevant transaction. This requirement will continue until the ‘offer period’ ends. If two or more persons cooperate on the basis of any agreement either express or tacit, either oral or written, to acquire an ‘interest’ in ‘relevant securities’ of MariaDB, they will be deemed to be a single person for the purpose of Rule 8.3 of the Irish Takeover Rules.

Dealing Disclosures must also be made by any offeror and by any persons acting in concert with them in accordance with Rule 8.2 of the Irish Takeover Rules.

In general, interests in securities arise when a person has long economic exposure, whether conditional or absolute, to changes in the price of the securities. In particular, a person will be treated as having an ‘interest’ by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Irish Takeover Rules, which can be found on the Irish Takeover Panel’s website.

Details of the offeree company in respect of whose relevant securities Dealing Disclosures must be made can be found in the Disclosure Table on the Irish Takeover Panel’s website at www.irishtakeoverpanel.ie, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether or not you are required to disclose a ‘dealing’ under Rule 8, please consult the Irish Takeover Panel’s website at www.irishtakeoverpanel.ie or contact the Irish Takeover Panel at telephone number +353 1 678 9020.

No profit forecasts, estimates or asset valuations

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for K1, Bidco, Topco or MariaDB, respectively for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for K1, Bidco, Topco or MariaDB, respectively. No statement in this Announcement constitutes an asset valuation.

Right to switch to a Scheme

K1 and Bidco reserve the right, with the consent of the Irish Takeover Panel and MariaDB, to elect to implement the acquisition of the MariaDB Shares by way of a scheme of arrangement of MariaDB under the Companies Act 2014. In such event, the scheme of arrangement will be implemented on substantially the same terms, so far as applicable, as those which would apply to the Offer, subject to appropriate amendments (including to statutory voting requirements) to reflect the change in method of implementing the Offer.

Overseas Shareholders

The laws of certain jurisdictions may affect the availability of the Offer (including the Unlisted Unit Alternative) to persons who are not resident in Ireland. Persons who are not resident in Ireland, or who are subject to laws of any jurisdiction other than Ireland, should inform themselves about, and observe, any applicable legal or regulatory requirements. Any failure to comply with any applicable legal or regulatory requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. To the fullest extent permitted by applicable Law, the companies and persons involved in the Offer (including the Unlisted Unit Alternative) disclaim any responsibility and liability for the violation of such restrictions by any person.

Unless otherwise determined by Bidco or K1 or required by the Irish Takeover Rules, and permitted by applicable law and regulation, the Offer (including the Unlisted Unit Alternative) will not be made available, directly or indirectly, in any Restricted Jurisdiction, and the Offer will not be capable of acceptance from within a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction.

The release, publication or distribution of this Announcement in or into certain jurisdictions may be restricted by the laws of those jurisdictions. Accordingly, copies of this Announcement and all other documents relating to the Offer (including the Unlisted Unit Alternative) are not being, and must not be, released, published, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction. Persons receiving such documents (including, without limitation, nominees, trustees and custodians) should observe these restrictions. Failure to do so may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable Law, K1, the K1 Group and Bidco disclaims any responsibility or liability for the violations of any such restrictions by any person. MariaDB Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

Further details in relation to overseas shareholders shall be contained in the Offer Document.

If you are a resident of the United States, please read the following:

This Announcement is not intended to, and does not, constitute or form part of any offer (including the Offer), invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, tender, exchange, sell or otherwise dispose of, any securities, or the solicitation of any vote or approval in any jurisdiction, nor will there be any acquisition or disposition of the securities referred to in this Announcement in any jurisdiction in contravention of applicable Law or regulation.

This Announcement is not a substitute for the Offer Document and the Form of Acceptance or any other document that Bidco may file with the SEC in connection with the Offer, if any. A solicitation and an offer to buy MariaDB Shares will be made pursuant to a Tender Offer Statement on Schedule TO that Bidco intends to file with the SEC. At the time the tender offer is commenced, MariaDB will file a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC with respect to the tender offer. MARIADB SHAREHOLDERS ARE URGED TO READ ANY SUCH DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE OFFER. SUCH DOCUMENTS SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Investors and MariaDB Shareholders will be able to obtain free copies of these materials (if and when available) and other documents containing important information about MariaDB and the Offer once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov.

The Offer, if made, will be made in the United States pursuant to the Exchange Act and otherwise in accordance with the requirements of the Irish Takeover Rules. Accordingly, the Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments that may be different from those typically applicable under U.S. domestic tender offer procedures and law. In addition, the Offer Document and any other documents relating to the Offer have been or will be prepared in accordance with the Irish Takeover Rules and Irish disclosure requirements, format and style, all of which may differ from those in the United States.

MariaDB is incorporated under the laws of Ireland. The director on the MariaDB Board at the date of this Announcement is resident in a country other than the United States. As a result, it may not be possible for United States holders of MariaDB Shares to effect service of process within the United States upon MariaDB or the director of MariaDB or to enforce against any of them judgements of the United States predicated upon the civil liability provisions of the federal securities laws of the United States. It may not be possible to sue MariaDB or its officers or director(s) in a non-US court for violations of US securities laws. In addition, US holders of MariaDB Shares should be aware that, if K1 and Bidco elect to proceed pursuant to a scheme of arrangement (as described herein), the federal securities laws of the United States may not be applicable.

Publication on website

This Announcement, together with all information incorporated into this document by reference to another source, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, will be made available on K1’s website (https://k1.com/meridian-offer-update/).

Neither the content of any such website nor the content of any other website accessible from hyperlinks on such website is incorporated into, or forms part of, this Announcement.

Availability of Hard Copies

Any MariaDB Shareholder may request a copy of this Announcement in hard copy form by contacting Leah Mosteller, K1, via telephone on +1 800 310 2870 or by email to lmosteller@k1.com (copying legal@k1im.com). Any written requests must include the identity of the MariaDB Shareholder and any hard copy documents will be posted to the address of the MariaDB Shareholder provided in the written request. A hard copy of this Announcement will not be sent to MariaDB Shareholders unless requested. Such persons may also request that all future documents, announcements and information to be sent to them in relation to the offer should be in hard copy form.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, any figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

THIS ANNOUNCEMENT IS BEING MADE PURSUANT TO RULE 2.7 OF THE IRISH TAKEOVER RULES

RECOMMENDED CASH OFFER

for

MARIADB plc

by

MERIDIAN BIDCO LLC 

which is an Affiliate of 

K1 INVESTMENT MANAGEMENT, LLC

as manager of K5 PRIVATE INVESTORS, L.P.

1.  Introduction

K1 Investment Management, LLC (“K1“) is pleased to announce the terms of a recommended cash offer to be made by Meridian Bidco LLC (“Bidco“), a newly formed Affiliate of K1, as manager of K5 Private Investors, L.P. (“K5“) to acquire the entire issued and to be issued share capital of MariaDB plc (“MariaDB“).

2.  Summary of the terms of the Offer

The Offer is subject to the Conditions set out in Appendix I to this Announcement and to be set out in the Offer Document.

Under the terms of the Offer, MariaDB Shareholders will be entitled to receive:

for each MariaDB Share                        $ 0.55 in cash   (the Cash Offer)

The Cash Offer values the entire issued share capital of MariaDB (on a fully diluted basis) at approximately $39.5m.

The Cash Consideration represents a premium of approximately:

• 189% to MariaDB’s closing share price of $0.19 on 5 February 2024 (being the last full trading day prior to the announcement by MariaDB of a forbearance agreement with RP Ventures LLC);
• 57% to MariaDB’s closing share price of $0.35 on 15 February 2024 (being the last date prior to the publication of K1’s Possible Offer Announcement);
• 129% to MariaDB’s average closing share price of $0.24 over the 30 trading day period ending 15 February 2024; and
• 90% to MariaDB’s average closing share price of $0.29 over the 60 trading day period ending 15 February 2024.

The Offer will extend to all issued MariaDB Shares not held by Bidco (or any Affiliate of Bidco) and any further MariaDB Shares which are unconditionally allotted or issued and fully paid before the Offer closes.

Unlisted Unit Alternative

As an alternative to the Cash Offer, Eligible MariaDB Shareholders may elect, in respect of all (but not some) of their MariaDB Shares, to receive, in lieu of the Cash Offer to which they are otherwise entitled, one unlisted, unregistered non-voting Class B unit of Topco (each, a “Topco Rollover Unit“) for each MariaDB Share (the “Unlisted Unit Alternative”), with such Topco Rollover Units to be issued on the terms and pursuant to the mechanism described in paragraphs 14 and 15.

In aggregate, the maximum number of Topco Rollover Units available to be issued to Eligible MariaDB Shareholders under the Unlisted Unit Alternative is limited to 15% of Topco’s fully diluted share capital (after issuance of all Topco Rollover Units to all Electing Shareholders).

If the aggregate number of Topco Rollover Units to be issued to all Electing Shareholders exceeds the Rollover Threshold then each Electing Shareholder’s number of Topco Rollover Units to which they would otherwise have been entitled will be reduced on a pro-rated basis (based on the relative holdings of MariaDB Shares as of immediately prior to the Initial Closing Date (as defined in Appendix I of this Announcement) of all of the Electing Shareholders), and the consideration for each MariaDB Share that is not exchanged for Topco Rollover Units will be paid in cash in accordance with the terms of the Cash Offer.

The key terms of the Unlisted Unit Alternative are summarised in paragraph 15 of this Announcement. The Topco Rollover Units will not be listed or registered under US securities laws, will not be transferable (subject to certain limited exceptions), will be non-voting (other than those non-waivable voting rights, if any, required pursuant to applicable Delaware law), will have limited information rights (except for certain limited information to be provided to holders of the Topco Rollover Units to be more fully described in the Offer Document and certain other financial information regarding Topco as the holders of Topco Rollover Units may reasonably request in writing from time to time (but no more frequently than annually)), and may be subject to dilution pursuant to any further issue of securities by Topco.

Bidco may in its sole discretion, withdraw the Unlisted Unit Alternative if there are any Electing Shareholders whose election to receive the Unlisted Unit Alternative will require registration of the Topco Rollover Units under US securities law (and there is not an applicable exemption for each such Electing Shareholder) (the “Rollover Withdrawal Right”). In the event Bidco exercises its Rollover Withdrawal Right, the Unlisted Unit Alternative will lapse, no Topco Rollover Units will be issued and the consideration payable in respect of each tendered MariaDB Share will be settled in cash in accordance with the terms of the Cash Offer. The Offer will be open for at least 10 business days after the announcement of Bidco’s exercise of its Rollover Withdrawal Right. For the avoidance of doubt, the exercise by Bidco of the Rollover Withdrawal Right shall not otherwise affect any validly received tenders, nor shall it constitute a variation of the Offer.

Unless otherwise determined by Bidco or K1 or required by the Irish Takeover Rules, and permitted by applicable law and regulation, the Unlisted Unit Alternative is not being offered, sold or delivered, directly or indirectly, in or into any Restricted Jurisdiction (and so MariaDB Shareholders in such jurisdictions will not be eligible to elect to receive the Unlisted Unit Alternative).

In addition, MariaDB Shareholders who wish to elect for the Unlisted Unit Alternative will be required to provide certain “Know Your Client” information as requested by Topco and K1. Further details regarding this eligibility requirement will be set out in the Offer Document. Failure to provide the required information will result in elections to receive the Unlisted Unit Alternative being invalid and Eligible MariaDB Shareholders who made such an invalid election will instead receive the Cash Consideration for the number of MariaDB Shares in respect of which they purported to make an election to receive the Unlisted Unit Alternative.

If the Offer becomes Effective, Ineligible MariaDB Shareholders and Eligible MariaDB Shareholders who do not validly elect to receive the Unlisted Unit Alternative shall be deemed to have elected for the Cash Offer and will automatically receive the Cash Consideration due under the Cash Offer for their entire holding of MariaDB Shares.

For the purposes of Rule 24.11 of the Irish Takeover Rules, an appropriate advisor will provide an estimate of the value of a Topco Rollover Unit, together with the assumptions, qualifications and caveats forming the basis of its estimate of value, in a letter to be included in the Offer Document. 

Further information about the Topco Rollover Units is set out in paragraphs 15 and 16 and will be included in the Offer Document.

Dividends and reorganisations of MariaDB’s share capital

If any dividend or other distribution is authorised, declared, made or paid in respect of MariaDB Shares on or after the date of this Announcement, K1 and Bidco reserve the right to reduce the consideration due pursuant to the Cash Offer (and, as the case may be, the consideration due under the Unlisted Unit Alternative) by the aggregate amount of such dividend or other distribution or return of value. In such circumstances, MariaDB Shareholders shall be entitled to retain any such dividend, distribution, or other return of value authorised, declared, made or paid.

The MariaDB Shares will be acquired pursuant to the Offer fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and other third party rights or interests together with all rights attaching thereto including, without limitation, the right to receive all dividends and other distributions (if any) announced, declared, made or paid after the date of this Announcement.

If any subdivision, reclassification, reorganisation, recapitalisation, split, combination, contribution or exchange of shares stock dividend or other distribution payable in any other securities of MariaDB in respect of the MariaDB Shares occurs on or after the date of this Announcement, K1 and Bidco reserve the right to adjust the consideration payable for each MariaDB Share under the terms of the Offer (including the consideration due under the Unlisted Unit Alternative) to provide the holders of MariaDB Shares the same economic effect as contemplated by the Offer prior to such event.

3.  Recommendation

Recommendation – Cash Offer

The MariaDB Board has, as required under the Irish Takeover Rules, due to conflicts of interest, recused itself from taking part in the formulation and communication of advice on the Offer to MariaDB Shareholders. Instead, IBI Corporate Finance, which has been appointed as independent financial advisor to MariaDB under Rule 3 of the Irish Takeover Rules, has, in that capacity, taken responsibility for considering the Offer and formulating an appropriate recommendation to be made to MariaDB Shareholders.

It is, in the context of the background to and reasons for recommending the Cash Offer, which are set out in paragraph 5 of this Announcement that IBI Corporate Finance has concluded that the terms of the Cash Offer are fair and reasonable and it would recommend that MariaDB Shareholders should accept the Cash Offer. Further detail will be included in the Offer Document or in a separate circular to be sent to MariaDB Shareholders by MariaDB.

No Recommendation – Unlisted Unit Alternative

IBI Corporate Finance is unable to advise as to whether or not the financial terms of the Unlisted Unit Alternative are fair and reasonable. This is because IBI Corporate Finance has not had any involvement in the development and validation of any financial projections for Topco. As a result, IBI Corporate Finance is unable to assess any plans Topco may have for the development of MariaDB or the Topco Group to the degree necessary to form an assessment of the value of the Unlisted Unit Alternative. IBI Corporate Finance also note the significant and variable impact that the disadvantages and advantages of the Unlisted Unit Alternative (certain of which are outlined in paragraph 16 of the main body of this Announcement) may have for individual Eligible MariaDB Shareholders. In terms of the advantages, these include, in particular, the ability to participate in potential future value creation of the MariaDB Group. In terms of the disadvantages, these include, in particular, (a) the level of uncertainty as to the future value of Topco Rollover Units, which will depend on the performance of the MariaDB Group over a number of years and which performance will be impacted by, amongst other things, the business plan and strategy of the business under Topco’s control; and (b) the terms of the Topco Rollover Units including the fact that they will be illiquid and non-transferable, will be subject to potential dilution in the event that additional securities are issued by Topco, will not carry voting rights, and will have limited information rights.

Accordingly, IBI Corporate Finance is unable to form an opinion as to whether or not the terms of the Unlisted Unit Alternative are fair and reasonable and is not making any recommendation to Eligible MariaDB Shareholders as to whether or not they should elect to receive the Unlisted Unit Alternative.

MariaDB Shareholders are encouraged to take into account the risk factors and other investment considerations outlined in paragraph 16 of the main body of this Announcement in relation to the Unlisted Unit Alternative, as well as their particular circumstances, when deciding whether to elect to receive the Unlisted Unit Alternative in respect of all of their holding in MariaDB Shares. MariaDB Shareholders should also ascertain whether acquiring or holding Topco Rollover Units is permitted or affected by the laws of the jurisdiction in which they reside and consider whether Topco Rollover Units are a suitable investment in light of their own personal circumstances. Accordingly, MariaDB Shareholders are strongly recommended to seek their own independent financial, tax and legal advice in light of their own particular circumstances and investment objectives before deciding whether to elect to receive the Unlisted Unit Alternative. Any decision to elect to receive the Unlisted Unit Alternative should be based on any such independent financial, tax and legal advice and full consideration of the information in this Announcement and the Offer Document (when published).

4.  Background to and K1’s compelling reasons for the Offer

MariaDB provides a mission critical product offering that occupies a strong position within the relational database market with an impressive global customer base across multiple industry sectors.

Having followed the development of the business through time, K1 believes that the Offer for MariaDB is an attractive opportunity given:

(a)        MariaDB’s strong competitive position as a market leading open-source relational database solution which has been downloaded over a billion times and is used across a variety of organizations ranging from small businesses to Fortune 500 organizations;

(b)        the opportunity to support MariaDB’s growth through organic and inorganic initiatives; and

(c)        the ability for management to have greater operating flexibility and focus as a private company.

Furthermore, MariaDB’s business model and product portfolio aligns with K1’s mandate and proven track record of investing in enterprise software companies providing mission critical products and services with high recurring revenues, strong retention rates and diversified customer bases. Finally, K1’s operating affiliate, K1 Operations LLC, has a strong track record of supporting management teams in executing operationally focused strategies designed to support the growth, development and profitability of their partner companies.

5.  Background to and reasons for recommending the Cash Offer

In considering the fairness and reasonableness of the terms of the Cash Offer, IBI Corporate Finance has taken into consideration the prospects for MariaDB’s share price absent a transaction and the realisable value to shareholders from other strategic options in particular the prospect of realising value to shareholders through a U.S. Chapter 11 Bankruptcy or an Irish Examinership Process.

MariaDB has now been in financial distress for a protracted period of time.

• A loan outstanding in the amount of $15.9 million from the European Investment Bank (“EIB”) fell due for repayment on 11 October 2023. MariaDB would not have been in a position to repay the loan from its own resources. On 10 October 2023, immediately prior to the EIB repayment date, MariaDB entered into a $26.5 million senior secured promissory note with RP Ventures LLC (“RPV“) (“the RPV Note“) to repay EIB and to provide ongoing funding for MariaDB.
• This in turn became repayable on 10 January 2024 and while initial forbearance was granted, this expired on 31 January 2024 and MariaDB has been technically insolvent since that date giving rise to a risk to the recovery of equity value for its shareholders.
• Negotiations with RPV and Hale Capital Partners to replace the RPV Note and raise capital through a convertible preferred equity financing have not resulted in a successful outcome and would in any event have been significantly dilutive to existing MariaDB shareholders.

MariaDB’s share price trading has reflected this uncertainty. Its shares traded at an average closing share price of $1.07 between 20 March 2023 (3 months post IPO) and 18 August 2023 (inclusive). On 17 August 2023, the share price opened at $0.90 and closed at $0.73. The volume weighted average share price on that date was $0.78. The share price fell precipitously thereafter. In the period from 21 August 2023 to 5 February 2024 (inclusive) shares traded at an average closing share price of $0.42. The share price closed at $0.19 per share on 5 February 2024. The longer this situation continues, the greater the risk to recovery becomes. In this context, in addition to implied value to shareholders, the executability of any proposal is a key assessment criteria.

A number of proposals have been made to acquire MariaDB since September 2023 with three possible offers for MariaDB under Rule 2.4 of the Irish Takeover Rules being brought forward. The first by Runa Capital LLC on 14 September 2023, the second by K1 on 15 February 2024 and a third by Progress Software Corp on 26 March 2024. Only K1 has announced a firm intention to proceed with an offer for MariaDB. The K1 Cash Offer proposes an offer price of $0.55 per MariaDB Share, which represents:

• A 189% premium to MariaDB’s closing share price of $0.19 on 5 February 2024 (being the last full trading day prior to the announcement by MariaDB of a forbearance agreement with RPV);
• A 57% premium to MariaDB’s closing share price of $0.35 on 15 February 2024 (being the last date prior to the publication of K1’s Possible Offer Announcement); and
• A 129% premium to MariaDB’s average closing share price of $0.24 over the 30 trading day period ending 15 February 2024.

K1 and affiliated entities also agreed to purchase the RPV Note. By acquiring the RPV Note, K1 will be in a position to remedy MariaDB’s current insolvency position and put it on a sound financial footing, thereby making a proposed acquisition of MariaDB viable. At this date no other interested party has tabled a proposal that achieves this outcome. No other institutional investor support capable of execution has been forthcoming that can remedy the current insolvency and any court appointed or supervised process to explore alternative strategic options will attenuate the process of reaching a potential resolution and potentially exacerbate the risk of further equity value being lost as MariaDB faces the prospect of being unable to meet its day-to-day obligations as they fall due.

K1, K5, Topco and Bidco have received irrevocable undertakings to accept the Offer in respect of in aggregate 34,912,697 MariaDB shares, representing in aggregate approximately 51.53% of the existing issued share capital of MariaDB as at 22 April 2024 (being the latest practicable date prior to the release of this Announcement). These undertakings continue to be binding in the event of a competing offer for MariaDB.

Accordingly, it is in this context that IBI Corporate Finance has concluded that the terms of the Cash Offer are fair and reasonable and would recommend that MariaDB Shareholders should accept the Cash Offer.

6.  Information on K1, Bidco and Topco

K1 is a global investment firm that builds category-leading enterprise software companies and has over $14.9 billion of assets under management. K1 partners with strong management teams of high growth technology businesses to help them achieve successful outcomes. With over 120 professionals, K1 and its operating affiliate, K1 Operations LLC, change industry landscapes with operationally focused growth strategies designed to rapidly scale portfolio companies. Since the inception of the firm, K1 has partnered with over 200 enterprise software companies including industry leaders such as Axcient, Checkmarx, Emburse, Elmo, Granicus, Litera Microsystems, Onit, Reveal