PRGS - Progress Software Corp. Statement regarding a Possible Offer for MariaDB plc | Benzinga
BURLINGTON, Mass., April 19, 2024 (GLOBE NEWSWIRE) -- NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN PART) IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
THIS IS AN ANNOUNCEMENT UNDER RULE 2.4 OF THE IRISH TAKEOVER PANEL ACT, 1997, TAKEOVER RULES, 2022 (THE "TAKEOVER RULES") AND IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE TAKEOVER RULES. THERE CAN BE NO CERTAINTY THAT ANY OFFER WILL BE MADE, NOR AS TO THE TERMS ON WHICH ANY SUCH OFFER WILL BE MADE.
POSSIBLE CASH OFFER
for
MARIADB PLC
by
PROGRESS SOFTWARE CORP.
Summary
- Further to the announcement made by Progress Software Corp. ("Progress") on March 26, 2024 (the "March Possible Offer Announcement"), Progress is today announcing, under Rule 2.4 of the Irish Takeover Rules, that it is considering a possible offer (the "Possible Offer") to acquire all of the debt and the entire issued and to be issued share capital of MariaDB plc ("MariaDB").
- Under the Possible Offer, each MariaDB shareholder would be entitled to receive:
- $0.60 for each MariaDB share, payable in cash.
- The Possible Offer would represent a premium of approximately:
- 9 per cent. to the possible offer of $0.55 per share made by K1 Capital, announced on February 16, 2024;
- 88 per cent. to MariaDB's average closing share price on the last 30 trading days prior to the March Possible Offer Announcement; and
- 216 per cent. to MariaDB's closing share price on February 5, 2024, the last full trading day prior to the announcement by MariaDB of a forbearance agreement with RP Ventures LLC.
- The Possible Offer values MariaDB's entire issued ordinary share capital at approximately $40.6 million.
- In addition, in connection with the closing of the transactions contemplated by the Possible Offer, Progress proposes that it would complete the purchase or repayment of the Senior Secured Promissory Note issued by MariaDB to RP Ventures LLC ("RP Ventures"), a company associated with Runa Capital, Inc. ("Runa"), on October 10, 2023 (the "RP Note"), with RP Ventures being entitled to receive:
- $40 million in total with respect to the RP Note (but excluding any amounts attributable to ownership of MariaDB shares).
- This represents a premium of approximately 55 per cent. to the outstanding amount of the RP Note including the principal and accrued interest as of March 31, 2024 of approximately $25.9 million.
- The Possible Offer implies an enterprise value of approximately $100.6 million and a multiple of approximately 2 times MariaDB's revenue for the twelve months ended December 31, 2023.
- Given the liquidity challenges faced by MariaDB, there are other potential outstanding liabilities, estimated to be approximately $20 million, which would be assumed by Progress should it complete an acquisition of MariaDB.
- Progress is engaging with stakeholders with a view towards making a firm offer, under Rule 2.7 of the Irish Takeover Rules, to acquire all of the debt and the entire issued and to be issued share capital of MariaDB (the "Firm Offer") as quickly as possible.
- Commenting on today's announcement, Yogesh Gupta, CEO of Progress, said:
- "Our ongoing due diligence of MariaDB's business has continued to strengthen our belief that Progress is the ideal fit for the customers, shareholders, people and community members of MariaDB. We remain excited about a possible combination with MariaDB and look forward to continuing our engagement and rapidly bringing this matter to a mutually beneficial conclusion."
Progress Background to and Reasons for the Possible Offer
- Progress believes there is a compelling strategic and financial rationale for an acquisition of MariaDB by Progress, and believes that Progress is the ideal long-term partner for MariaDB.
- Progress believes the relational database management (RDBMS) product from MariaDB offers an attractive value proposition for its customers looking for a scalable, reliable open-source RDBMS and that it has a proven track record of both delivering mission-critical database management products and collaborating with and nurturing a vibrant open-source community.
- Progress believes that MariaDB would be an excellent addition to the Progress portfolio, by providing relational database capabilities to customers with applications built with a wide variety of languages and approaches. Progress has made other recent acquisitions to extend its database capabilities, and believes that the combination of data platforms provides the means for our customers to embrace AI, leveraging private information with LLMs using Retrieval Augmented Generation.
- Customer success, along with innovation and acquisition, is foundational to Progress' strategy and is reflected by its high retention rates and customer satisfaction scores. Progress has a track record of success that goes back more than 40 years and is proud to have customers who have used Progress products since its foundation and continue to rely on and expand their use of Progress products. Progress has a robust portfolio of infrastructure software products to build, deploy and manage enterprise applications. Progress believes that this robust portfolio and proven financial success and stability make Progress the ideal long-term partner for MariaDB.
- Progress believes that MariaDB is an attractive business. We strongly believe in the benefits of the combination of MariaDB's products, customer relationships and people.
- Progress believes that the Possible Offer aligns to Progress' strategy and track record of acquisitions, and MariaDB meets many aspects of Progress' disciplined approach to acquisitions.
- Overall, Progress believes that ownership of MariaDB by Progress provides the best environment for MariaDB to grow and provides a platform of long-term stability and investment for the company, its customers, employees and wider stakeholders.
MariaDB's financial position, Board composition and transaction structure
- Progress understands that the MariaDB Board has been placed in a difficult position because of its challenging financial position. Progress also understands that RP Ventures has the right to foreclose the RP Note, resulting in a potential liquidity issue, and that RP Ventures has de facto controlling rights over the Maria DB Board.
- In formulating the Possible Offer, Progress has balanced the requirement for the RP Note to be purchased or repaid at a significant premium and the interests of the MariaDB business, MariaDB shareholders and all other stakeholders. Progress believes that the Possible Offer achieves this balance and is in the best interest of all stakeholders.
- The Possible Offer also presents the opportunity for ownership of MariaDB by Progress, which Progress believes provides the best environment for MariaDB to grow and provides a platform of long-term stability and investment for the company and its stakeholders.
Due Diligence
- Since the March Possible Offer Announcement, Progress has been provided with due diligence information in order to evaluate the Possible Offer, and Progress has invested significantly in the due diligence process with support from third parties. The due diligence undertaken to date has enhanced Progress' assessment of the enterprise value of MariaDB.
- Progress' due diligence is at an advanced stage, and Progress expects to complete its due diligence process quickly once a set of outstanding due diligence items requested are received.
Preconditions
- The making of the Possible Offer is subject to the satisfaction or waiver of the following preconditions:
- MariaDB continuing to trade as a going concern and being funded for the period prior to the completion of the Possible Offer and, subject to consent from the Irish Takeover Panel, that prior to an announcement pursuant to Rule 2.7 of the Irish Takeover Rules being made, RP Ventures enters into an agreement with Progress (on terms satisfactory to Progress) that on any Firm Offer being declared wholly unconditional or the effective date of a scheme, RP Ventures shall unconditionally sell (or accept repayment for) the debt owed to RP Ventures from MariaDB to Progress;
- the completion of due diligence in a form satisfactory to Progress;
- any offer made by Progress receiving the recommendation of the MariaDB Board; and
- the receipt of irrevocable undertakings from shareholders in a form and amount acceptable to Progress.
- The preconditions set out above may be waived in whole or in part by Progress at its sole discretion. There can be no certainty that an offer will be made, even if the preconditions referred to above are satisfied or waived.
- In accordance with Rule 2.6(a) of the Irish Takeover Rules, Progress is required, by no later than 5.00 p.m. ET on May 7, 2024 (being the 42nd day following the March Possible Offer Announcement) to either:
(i) announce a firm intention to make an offer for MariaDB in accordance with Rule 2.7 of the Irish Takeover Rules; or
(ii) announce that it does not intend to make such an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Irish Takeover Rules applies.
- This deadline can be extended with the consent of the Irish Takeover Panel in accordance with Rule 2.6(c) of the Irish Takeover Rules.
- Progress confirms that the Possible Offer is a possible offer under Rule 2.4 of the Irish Takeover Rules for all the issued and to be issued share capital of MariaDB. The Possible Offer would be made following the satisfaction of the preconditions set out below. Such preconditions may be waived in whole or in part by Progress at its sole discretion.
- Progress reserves the right to effect the Possible Offer either by way of an Irish High Court-sanctioned scheme of arrangement or a Takeover Offer under Chapter 1 of Part 9 of the Companies Act 2014.
Enquiries
Progress
Investors: Michael Micciche +1 781-850-8450 Investor-Relations@progress.com
Media: Erica McShane +1 781-280-4000 PR@progress.com
Europa Partners (Financial Advisor to Progress)
Jan Skarbek +44 20 7451 4542
Dominic King
About Progress
Progress (NASDAQ:PRGS) provides software that enables organizations to develop and deploy their mission-critical applications and experiences, as well as effectively manage their data platforms, cloud and IT infrastructure. As an experienced, trusted provider, we make the lives of technology professionals easier. Over 4 million developers and technologists at hundreds of thousands of enterprises depend on Progress. Learn more at www.progress.com.
Responsibility statement
The Progress board of directors accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Progress board of directors (who have taken all reasonable care to ensure that such is the case) the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.
Important notice relating to financial advisor
Europa Partners Limited ("Europa"), which is authorised by the Prudential Regulation Authority ("PRA") and regulated by the Financial Conduct Authority ("FCA") and the PRA in the United Kingdom, is acting exclusively for Progress and for no one else in connection with the Possible Offer and will not be responsible to anyone other than Progress for providing the protections afforded to its clients or for providing advice in connection with the Possible Offer. Neither Europa, 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 Europa in connection with the Possible Offer, this announcement, any statement contained herein or otherwise.
Further Information; No Offer or Solicitation
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 Possible 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 ...