MariaDB, the renowned open-source relational database management system, is once again the subject of a potential takeover bid. This time, the offer comes from California-based K1 Investment Management. The proposal includes buying all MariaDB stock at a price of $0.55 per share, which would amount to roughly $37 million based on the company’s February 5 closing valuation.
MariaDB was born as a fork of MySQL 15 years ago, after MySQL’s project creators became concerned about its independence following a series of billion-dollar acquisitions that led Oracle to effectively own MySQL in 2009. MariaDB is considered a “drop-in” replacement for those seeking a fully open source MySQL alternative, and has been used by some major companies for storing and manipulating data across their applications.
Despite raising some $125 million in venture funding to develop premium features and services on top of the core project, MariaDB’s journey has been far from smooth. The company went public in December 2022 via a special purpose acquisition company (SPAC). However, its market cap has seen a significant drop since then, falling from an opening day market cap of $445 million in late 2022 to just over the $10 million mark since the turn of the year.
This financial struggle has been due to a string of sub-par earning reports, with the New York Stock Exchange (NYSE) warning MariaDB in September that it wasn’t in compliance with listing rules that stipulate a company’s average global market capitalization can’t fall below $50 million over a consecutive 30-day trading period.
In the months that followed, MariaDB received its first “unsolicited non-binding indicative proposal,” this time from existing investor Runa Capital. However, Runa later stated that it wouldn’t be acquiring MariaDB after all, but instead an associate company called RP Ventures would be providing a $26.5 million loan.
Fast-forward to early February this year, and MariaDB announced a temporary forbearance agreement with its creditors. This news led MariaDB’s stock to more than double in a couple of days, which is why K1 is making its bid relative to MariaDB’s closing price before any forbearance agreement was announced.
K1 says it’s offering a 189% premium on MariaDB’s February 5 closing price, which was $0.19 and equated to a market cap of around $12.9 million. There is no guarantee that K1 will place a formal bid for MariaDB, but K1 has a track record of later-stage investments and a handful of acquisitions to its name, positioning it closer toward the private equity realm.
K1 has until March 29, 2024, either to formalize its offer or to ditch the plans altogether, as per Irish Takeover Rules which MariaDB is subject to owing to the location of one of its headquarters (it has one in Dublin, Ireland, and another in Redwood City, California).
The future of MariaDB is uncertain, but what is clear is that the company is in a pivotal moment. Whether K1’s bid will be the lifeline MariaDB needs, or if it will continue to struggle, remains to be seen. For now, all eyes are on K1 and MariaDB as the deadline for the offer approaches.
