MariaDB gets acquisition proposal after default; triggers new default

By William Gullotti

Buffalo, N.Y., Feb. 20 – MariaDB plc announced on Feb. 19 that it received an unsolicited non-binding indicative proposal from K1 Investment Management LLC on Feb. 15 to acquire the entire issued and to be issued share capital of the company, according to an 8-K filing with the Securities and Exchange Commission.

K1 publicly announced on Feb. 16 that the offer was made through K5 Private Investors, LP, a fund controlled by K1.

As previously reported, MariaDB defaulted on its $26.5 million senior secured promissory note with RP Ventures LLC at its maturity on Jan. 31, 2024. This resulted in a forbearance agreement between lender and borrower on Feb. 5, under which RP Ventures agreed not to exercise its rights and remedies related to the promissory note until Feb. 21, to allow for further negotiations to replace the promissory note and raise capital through a convertible preferred equity financing.

Under the forbearance agreement, interest accrues at the default rate, which is an additional 2% over the regular rate of 10%. The company also agreed to pay RP Ventures a forbearance fee of $100,000 and to reimburse all reasonable and documented fees and out-of-pocket expenses of RP Ventures and any of its directors, officers, employees or agents, including its counsel, consultant and any other advisors, in connection with the forbearance agreement.

The announcement of the proposal by K1 constituted an immediate event of default under the forbearance agreement, terminating it on Feb. 16. With the termination and new event of default, RP Ventures may declare all principal and accrued interest on the promissory note to be immediately due and payable. Interest accrues at the default rate, which is an additional 2% over the regular rate of 10%.

On Feb. 17, RP Ventures notified the company of the forbearance agreement default and its right to exercise its rights and remedies. Included with that notification was a copy of an activation notice, submitted by RP Ventures to Bank of America, NA, which asserted its control rights over the company’s deposit account.

MariaDB is currently in discussions with RP Ventures to secure bridge financing in the event the company is not able to obtain cash through its deposit account. There can be no guarantee that the company will be able to secure bridge financing.

Under the Irish Takeover Rules, which necessitated the announcement and subsequent actions by RP Ventures, K1 is required to announce a firm intention to make an offer for the company or formally rescind the non-binding offer by 5 p.m. ET on March 29.

MariaDB is a new generation cloud database company based in Redwood City, Calif., and Dublin.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.