BlackBerry has recently announced entering into a patent sale agreement with Catapult IP Innovations Inc., a Delaware company. BlackBerry has agreed to sell all of its non-core patent assets to Catapult for a total of USD 600 million.
BlackBerry noted that the patents essential to BlackBerry’s current core business operations are excluded from the transaction. The company will receive a license back to the patents being sold, which relate primarily to mobile devices, messaging, and wireless networking. The company also mentioned that this transaction would not impact customers’ use of any of BlackBerry’s products, solutions, or services.
According to BlackBerry, Catapult is a special purpose vehicle formed to acquire its patent assets. Catapult’s principal funding for the acquisition will be a USD 450 million senior secured term loan, for which it has received USD 400 million of conditional commitments from a lending syndicate led by Toronto-based Third Eye Capital that includes a Canadian pension fund.
At closing, BlackBerry will receive USD 450 million in cash and a promissory note in the principal amount of USD 150 million.
The promissory note will be secured by a second lien on the assets of the purchaser and will be subordinated to the rights of the senior lending syndicate. Moreover, the promissory note will be payable in five equal annual installments of USD 30 million in cash commencing on the third anniversary of the closing date, provided that the senior loan is not in default.
The completion of the transaction is conditional upon the satisfaction of all regulatory conditions under the Hart–Scott–Rodino Antitrust Improvements Act in the United States and the Investment Canada Act. Accordingly, this transaction could take up to 210 days.
Meanwhile, BlackBerry has filed a Current Report on Form 8-K with the U.S. Securities and Exchange Commission in connection with its entry into the patent sale agreement, containing further information, including a description of the financing conditions relating to the transaction.
Source: BlackBerry
