MariaDB, the company behind the open source relational database management system, is facing a potential takeover bid from K1 Investment Management, a California-based firm. The offer, which is currently in the preliminary stages, involves a proposal to purchase all of MariaDB’s stock at a price of $0.55 per share, totaling approximately $37 million based on the company’s February 5 closing valuation.
Key Takeaway
MariaDB, a struggling database company, is considering a potential acquisition by K1 Investment Management for approximately $37 million. The offer comes amidst financial challenges and significant changes within the company, marking a crucial period for its future.
The Offer and Company’s Situation
The offer from K1 Investment Management comes at a time of significant changes within MariaDB. The company has recently undergone a change in leadership with the appointment of a new CEO, and has also initiated a substantial downsizing effort by divesting its database-as-a-service and geospatial businesses.
MariaDB’s Background and Financial Struggles
MariaDB originated as a fork of MySQL 15 years ago, following concerns about MySQL’s independence after it was acquired by Oracle. Despite being considered a viable open source alternative to MySQL, the company has faced financial challenges. After raising $125 million in venture funding over the years, MariaDB went public in December 2022 through a special purpose acquisition company (SPAC). However, its market performance has been disappointing, with its market cap plummeting from $445 million to just over $10 million since the beginning of the year.
Takeover Proposals and Future Outlook
Prior to K1’s offer, MariaDB received a proposal from existing investor Runa Capital, which was later retracted in favor of a $26.5 million loan from an associate company. The recent offer from K1 represents a 189% premium on MariaDB’s February 5 closing price. K1 has until March 29, 2024, to formalize its offer or withdraw, in accordance with Irish Takeover Rules due to MariaDB’s headquarters in Dublin, Ireland.
