BlackBerry agrees to sell legacy patents for $600 million
WATERLOO, ON, Jan. 31, 2022 /PRNewswire/ — BlackBerry Limited (NYSE: BB; TSX: BB), today announced that it has entered into a patent sale agreement with Catapult IP Innovations Inc., a Delaware company, pursuant to which BlackBerry has agreed to sell substantially all of its non-core patent assets to Catapult for a total consideration of $600 million.
Patents that are essential to BlackBerry’s current core business operations are excluded from the transaction. BlackBerry will license the patents sold, which primarily relate to mobile devices, messaging and wireless networking. This transaction will not affect customers’ use of BlackBerry products, solutions or services.
Catapult is a special purpose vehicle formed to acquire BlackBerry patent assets. Catapult’s primary financing for the acquisition will be a $450 million senior secured term loan, for which it has received $400 million in contingent commitments from a lending syndicate led by Third Eye Capital, based in Toronto, which includes a Canadian pension fund.
At closing, BlackBerry will receive $450 million in cash and a promissory note in the principal amount of $150 million. The promissory note will be secured by a second lien on the assets of the purchaser and will be subordinate to the rights of the master lending syndicate. The promissory note will be payable in five equal annual installments of $30 million in cash commencing on the third anniversary of the closing date, provided the senior loan is not in default.
Completion of the transaction is conditional upon, among other things, the satisfaction of all regulatory conditions under the Hart–Scott–Rodino Antitrust Improvements Act in the United States and the Investment Canada Act. This process can take up to 210 days.
BlackBerry has filed a current report on Form 8-K with the United States Securities and Exchange Commission in connection with its conclusion of the patent sale agreement, which contains additional information, including a description of the financing terms relating to the transaction.
BlackBerry (NYSE: BB; TSX: BB) provides intelligent security software and services to businesses and governments around the world. The company secures more than 500 million devices, including 195 million vehicles. Based in Waterloo, Ontario, the company leverages AI and machine learning to deliver innovative solutions in the areas of cybersecurity, security and data privacy solutions, and is a leader in the areas of endpoint security, endpoint management, encryption and integrated systems. BlackBerry’s vision is clear: to deliver a connected future you can trust.
Blackberry. Smart security. All over.
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This press release contains forward-looking statements within the meaning of certain securities laws, including under the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including statements regarding the transaction proposed transaction between BlackBerry and Catapult, the amount of consideration that BlackBerry will receive therein the timing and expected results of the proposed transaction and regulatory approvals, the potential impact of the proposed transaction on BlackBerry customers, expectations and BlackBerry beliefs, and other statements that are not historical facts.
The words “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “could”, “intend”, “believe”, “target”, ” plan” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are based on BlackBerry’s current plans, objectives, estimates, assumptions, expectations and intentions and inherently involve significant risks and uncertainties, many of which are beyond BlackBerry’s control. Many factors could cause actual achievements with respect to the transaction and the timing of events to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the risks and uncertainty associated with the ability of Catapult and BlackBerry to complete the proposed transaction. on the proposed terms or on the planned timetable, or not at all; risks and uncertainties relating to the financing required and the satisfaction of regulatory and other conditions to complete the proposed transaction; the occurrence of any event, change or other circumstance that may lead to the termination of the patent sale contract relating to the proposed transaction; the effects of the announcement of the proposed transaction or any other announcement or completion of the proposed transaction on the market price of BlackBerry common stock; failure to realize the expected benefits of the proposed transaction, including the risks associated with the payment of consideration after closing and the availability of funds therefor; risks relating to future opportunities and plans for BlackBerry’s business and BlackBerry’s results after completion of the proposed transaction; the risk of litigation related to the proposed transaction, including any resulting costs or delays; significant transaction costs and/or unknown or invaluable liabilities; the risks of diverting BlackBerry management’s attention from ongoing business operations; risks related to the proposed transaction disrupting BlackBerry’s operations and making it more difficult for BlackBerry to conduct business as usual or for BlackBerry to maintain relationships with consumers, resellers, channel partners or other third parties; changes in tax provisions, adoption of new tax legislation or exposure to additional tax liabilities and other changes in laws and regulatory initiatives; risks related to the COVID-19 pandemic; adverse economic, geopolitical and environmental conditions; and other risks and uncertainties affecting BlackBerry, including those described from time to time under “Risk Factors” and elsewhere in BlackBerry’s filings and reports to the SEC, including those discussed in BlackBerry’s Annual Report on Form 10-K and the “Cautionary Note Regarding Transfer -Looking Statements” of BlackBerry’s MD&A, as well as BlackBerry’s Current Report on Form 8-K filed today, which contains further details on the Patent Sale Agreement (copies of which may be obtained at www.sedar.com Where www.sec.gov). All of these factors should be carefully considered and readers should not place undue reliance on BlackBerry’s forward-looking statements. In addition, other risks and uncertainties not currently known to BlackBerry may also affect its forward-looking statements and may cause actual results and the timing of events to differ materially from those anticipated.
The forward-looking statements made in this press release are made only as of the date hereof or as of the dates indicated in the forward-looking statements and reflect the views expressed therein regarding future events as of such dates. BlackBerry has no intention and assumes no obligation, and expressly disclaims any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as applicable law requires it.
SOURCE BlackBerry Limited