BURLINGTON, Mass. - Progress Software Corp. (NASDAQ:PRGS), a provider of application development and digital experience technologies, is considering a cash offer to acquire all issued and to be issued share capital of MariaDB Corporation Plc (NYSE:MRDB), a global leader in open-source database solutions.
The announcement made today follows a previous statement on March 26, 2024, regarding Progress Software’s interest in MariaDB.
The proposed transaction would involve a cash payment of $0.60 per share to MariaDB shareholders, valuing the company's entire issued share capital at approximately $40.6 million. This offer represents a 9% increase over a previous offer from K1 Capital and a substantial premium over MariaDB’s recent trading prices.
In addition to the equity purchase, Progress Software proposes to buy or repay a Senior Secured Promissory Note issued by MariaDB to RP Ventures LLC, associated with Runa Capital, at a 55% premium over the outstanding amount, totaling approximately $40 million.
The potential acquisition suggests an enterprise value of roughly $100.6 million for MariaDB, which is about twice the revenue of MariaDB for the twelve months ending December 31, 2023. The offer is also inclusive of the assumption of MariaDB's estimated liabilities of $20 million.
Progress Software's CEO, Yogesh Gupta, commented on the potential acquisition, emphasizing the strategic fit and the enhanced value proposition for customers, shareholders, and the community of MariaDB. Gupta expressed confidence in the alignment of this acquisition with Progress Software's long-term strategy and track record of successful acquisitions.
Progress Software must either announce a firm intention to make an offer or declare that it does not intend to do so by 5:00 p.m. ET on May 7, 2024, according to the Irish Takeover Rules.
This announcement is based on a press release statement.
InvestingPro Insights
As Progress Software Corp. (NASDAQ:PRGS) eyes a strategic acquisition of MariaDB Corporation Plc, its financial health and market performance are of keen interest to investors and stakeholders alike. According to the latest real-time data from InvestingPro, Progress Software presents a mixed bag of financial metrics that could influence the outcome and perceived value of this potential transaction.
The company's market capitalization stands at a robust $2.16 billion, reflecting investor confidence in its market position and growth prospects. Progress Software's gross profit margin impressively hits 85.82% for the last twelve months as of Q1 2024, a testament to the company's operational efficiency and pricing power. This is particularly relevant as the company looks to integrate MariaDB's operations, where maintaining high-profit margins will be crucial for the success of the acquisition.
One of the key InvestingPro Tips highlights that Progress Software is trading near its 52-week low, which might suggest a value opportunity for investors. The company's stock is currently at 80.51% of its 52-week high, potentially indicating room for recovery, especially if the acquisition proves to be synergistic and accretive to earnings.
Moreover, with a forward-looking perspective, analysts have a positive outlook on the company's profitability, as indicated by another InvestingPro Tip stating that net income is expected to grow this year. This forward momentum could be further bolstered by the strategic acquisition of MariaDB, assuming successful integration and realization of anticipated synergies.
For investors seeking more in-depth analysis and additional InvestingPro Tips related to Progress Software, they can explore further by visiting https://www.investing.com/pro/PRGS. Currently, there are 9 more tips available on InvestingPro, offering a comprehensive view of the company's financial landscape. To access these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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