Struggling database firm MariaDB may very well be taken non-public in $37M deal

MariaDB is the topic of one other potential takeover bid, as the corporate behind the eponymous open supply relational database administration system (RDBMS) confirmed it had obtained a provisional supply from California-based K1 Investment Management.

K1 quietly revealed on Friday that it had tabled what is called an “unsolicited non-binding indicative proposal” for MariaDB, which — as its title suggests — is a non-binding exploratory supply which will change relying on how negotiations progress within the coming weeks. This proposal consists of shopping for all MariaDB inventory in MariaDB at a value of $0.55 per share, which might quantity roughly to $37 million based mostly on the corporate’s February 5 closing valuation, although it has but to find out what kind this supply will take.

The information comes amid main modifications and upheaval on the firm which has seen a new CEO enter the fray and a sizeable downsizing endeavor because it offloaded each its database-as-a-service and geospatial businesses.

Forked off

MariaDB emerged as a fork of MySQL 15 years in the past, after MySQL’s venture creators grew to become involved about its independence within the wake of a series of billion-dollar acquisitions that led Oracle to effectively personal MySQL in 2009. To this present day, MariaDB is taken into account a “drop-in” alternative for these searching for a totally open supply MySQL different, and has been utilized by big-name corporations for storing and manipulating knowledge throughout their functions.

The business entity behind MariaDB raised roughly $230 million in enterprise funding via the years to develop premium options and companies on prime of the core venture, ultimately going public in December 2022 through a particular goal acquisition firm (SPAC). As with nearly most SPAC-based IPOs, MariaDB’s floatation has been removed from a powerful success, falling from a gap day market cap of $445 million in late 2022 (which itself was down significantly on its earlier private enterprise value of $672 million at its Series D round) right into a perennial nosedive that has seen it hover at simply over the $10 million mark for the reason that flip of the yr.

On the coronary heart of all this has been a string of sub-par earning reports, with the New York Inventory Change (NYSE) warning MariaDB in September that it wasn’t in compliance with itemizing guidelines that stipulate an organization’s common international market capitalization can’t fall beneath $50 million over a consecutive 30-day buying and selling interval.

Within the months that adopted, MariaDB received its first “unsolicited non-binding indicative proposal,” this time from current investor  Runa Capital which tentatively provided $0.56 per share in money. Three weeks later, Runa stated that it wouldn’t be buying MariaDB in spite of everything, however as an alternative an affiliate firm known as RP Ventures would be offering a $26.5 million mortgage.

Quick-forward to early February this yr, and MariaDB introduced a brief forbearance settlement with its collectors which means that they’d chorus from exercising any treatments as set out within the mortgage settlement whereas another financing resolution was sought. This information led MariaDB’s stock to more than double in a few days, which is why K1 is making its bid relative to MariaDB’s closing value earlier than any forbearance settlement was introduced.

Certainly, K1 says it’s providing a 189% premium on MariaDB’s February 5 closing value, which was $0.19 and equated to a market cap of round $12.9 million. There isn’t a assure that K1 will place a proper bid for MariaDB, however not like Runa Capital which is extra of a standard VC, K1 has a track record of later-stage investments over its 12-year historical past that positions it nearer towards the non-public fairness realm. And maybe extra importantly, it already has a handful of acquisitions to its title, together with the $319 million purchase of Australia’s ELMO Software program in 2022 which it additionally took non-public within the acquisition course of.

So in some ways, K1 is maybe higher suited to take over MariaDB than Runa was, even when it in the end decides towards it.

K1 has till March 29, 2024, both to formalize its supply or to ditch the plans altogether, as per Irish Takeover Rules which MariaDB is topic to owing to the situation of one among its headquarters (it has one in Dublin, Eire, and one other in Redwood Metropolis, California).

It’s additionally value noting that in gentle of the woes over on the business MariaDB group, the associated MariaDB Foundation, answerable for governance across the open supply MariaDB venture, recently inked a major sponsorship deal with Amazon Internet Providers (AWS) which ought to go a way towards making certain the lights keep on on the community-driven MariaDB incarnation.