K1 Investment Management, located in California, has made a preliminary offer to acquire MariaDB, an open-source relational database management system (RDBMS).
K1 discreetly stated on Friday that it has submitted an “unsolicited, non-binding indicative proposal” for MariaDB, which is an exploratory offer that may vary based on discussions in the following weeks. This offer involves purchasing all MariaDB shares for $0.55 per share, or approximately $37 million based on the company’s February 5 closing value, although it has yet to be finalized.
The announcement follows a new CEO and a dramatic reduction of its database-as-a-service and geospatial businesses.
Split off
After Oracle acquired MySQL in 2009 with a succession of billion-dollar purchases, MySQL’s architects worried about its independence and forked MySQL 15 years ago to create MariaDB. Even today, MariaDB is a “drop-in” substitute for MySQL and is utilized by big-name firms to store and manipulate data.
MariaDB secured $230 million in venture capital to create premium features and services on top of the core project before going public in December 2022 via a special purpose acquisition company. MariaDB’s IPO, like most SPAC-based IPOs, has struggled. Its opening day market cap of $445 million in late 2022 was down significantly from its previous private enterprise value of $672 million at its Series D round, and it has hovered at just over $10 million since the turn of the year.
Due to a string of subpar earnings reports, the New York Stock Exchange (NYSE) warned MariaDB in September that it was in violation of listing rules that limit a company’s average global market capitalization to $50 million over a 30-day trading period.
In the months that followed, MariaDB received its first “unsolicited non-binding indicative proposal” from Runa Capital, which offered $0.56 per share in cash. Runa said three weeks later that it would not acquire MariaDB but would instead borrow $26.5 million from RP Ventures.
In early February, MariaDB announced a temporary forbearance arrangement with its creditors, preventing them from pursuing any loan agreement remedies while seeking other funding. This announcement doubled MariaDB’s shares in two days, therefore K1 is bidding compared to its closing price before any forbearance arrangement was published.
K1 claims to be giving 189% more than MariaDB’s February 5 closing price of $0.19, which gave it a market valuation of $12.9 million. K1 may not bid for MariaDB, but unlike Runa Capital, which is a conventional VC, K1 has a 12-year history of later-stage investments that puts it closer to private equity. More notably, it has made many acquisitions, including the $319 million acquisition of Australia’s ELMO Software in 2022, which it took private.
K1 may be more positioned to take over MariaDB than Runa, even if it chooses against it.
Due to its headquarters in Dublin, Ireland, and Redwood City, California, MariaDB is subject to the Irish Takeover Rules, which give K1 until March 29, 2024, to formalize their bid or abandon it.
In light of the commercial MariaDB organization’s woes, the MariaDB Foundation, which governs the open-source MariaDB project, recently signed a major sponsorship deal with Amazon Web Services (AWS) to help keep the community-driven MariaDB project afloat.
The struggling database firm MariaDB may be privatized for $37M.
