MariaDB's financial rollercoaster: The plot thickens

This week NYSE-listed MariaDB confirmed the receipt of a non-binding proposal from K1 Investment Management for a private acquisition valued at $37 million. A rollercoaster of events unfolds.
MariaDB's financial rollercoaster: The plot thickens

Earlier this week the board at Finnish-founded open-source database management system MariaDB confirmed that the company had received a non-binding proposal from K1 Investment Management to take the company private in a deal valued at approximately $37 million.

Dated 15 February 2024, the proposal would see K1 acquire all issued, and to be issued, shares of MariaDB at $0.55 per share, a 189% premium on the company’s closing price as of 5 February 2024.

Founded in late 2009, you’ll be quick to remember that in early 2022, MariaDB closed a $104 million Series D round and announced its intent to list on the NYSE via a SPAC (remember those?) merger with Angel Pond Holdings. In December of the same year, MariaDB debuted under the ticker MRDB at a share price of $4.11.

Things have been going downhill ever since.

One year later, company shares were trading at $0.35 despite installing a new CEO in late May 2023 and selling off its SkySQL database-as-a-service.

On September 15th of last year, Runa Capital, one of MariaDB’s earliest investors, floated a non-binding proposal to delist the company and acquire all shares at $0.56, a markup of $0.13 per share. 

The 10th of October would then see Runa Capital have a change of heart, announcing it had no intention to make an offer, but rather substitute support for the company with a bridge loan of up to $26.5 million provided by Stockholm-based RP Ventures. 

On the 10th of January of this year, MariaDB defaulted on the loan, failing to pay the outstanding principal, interest, and other applicable fees, and was trading at $0.19 per share, equating to a market cap of approximately $12.9 million.

Now, here’s where things begin to get interesting. 

The premium quotation of $0.55 per share from K1 is tied to the 5th of February, the last full day of trading prior to MariaDB announcing a possible forbearance agreement with RP Ventures LLC and Hale Capital Partners, a move that would stave off any legalities, and replace the senior secured promissory note and raise capital through a convertible preferred equity financing action

This announcement triggered a run on MariaDB’s stock price, sending it skyrocketing to $0.47 per share by the closing bell just two days post-publication.

However, it would now appear that MariaDB is in default of the original loan and that the forbearance agreement is off due to a violation of the terms set therein, specifically via K1 publicly announcing its non-binding proposal to acquire the company’s shares.

But wait, there’s more — late Wednesday evening an 8-K, a filing required by the SEC stipulating that companies announce major events that shareholders should know about, appeared noting that MariaDB co-founder, as well as one of the founding partners and advisor venture capital firm OpenOcean, Michael “Monty” Widenius had been added as a Reporting Person in the proceedings.

In so much, Widenius has agreed to work exclusively with Runa Capital going forward, with Runa Capital ensuring that Widenius would be provided with the opportunity to invest in any transaction between MariaDB and Runa Capital involving any form of financing, acquisition or change of control, including any acquisition of all or a material portion (5%) of MariaDB’s assets or equity.

Any derivation from this agreement would see Widenius, who holds approximately 5% of MariaDB's shares immediately cease his support and involvement with the company.

Break out the popcorn, for this is sure to be one interesting series of events upcoming in the history of a company that’s already seen its fair share of ups and downs.

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