BlackBerry has agreed to sell its patent assets related to mobile devices, messaging and wireless networking to Catapult IP Innovations for $600 million. Catapult, a special purpose vehicle, will fund the deal with a $450 million senior loan, for which it has received $400 million of conditional commitments from a syndicate led by Third Eye Capital and that includes a Canadian pension fund. Based in Waterloo, Ontario, BlackBerry is a security software and services provider.
BlackBerry Agrees to Sell Legacy Patents for $600M
WATERLOO, ONTARIO – January 31, 2022 – BlackBerry Limited (NYSE: BB; TSX: BB), announced today 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 total consideration of $600 million.
Patents that are essential to BlackBerry’s current core business operations are excluded from the transaction. BlackBerry will receive a license back to the patents being sold, which relate primarily to mobile devices, messaging and wireless networking. This transaction will not impact customers’ use of any of BlackBerry’s products, solutions or services.
Catapult is a special purpose vehicle formed to acquire the BlackBerry patent assets. Catapult’s principal funding for the acquisition will be a $450 million senior secured term loan, for which it has received $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 $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 subordinated to the rights of the senior 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 that the senior loan is not in default.
Completion of the transaction is conditional upon, among other things, satisfaction of all regulatory conditions under the Hart–Scott–Rodino Antitrust Improvements Act in the United States and the Investment Canada Act. This process could take up to 210 days.
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, which contains further information including a description of the financing conditions relating to the transaction.
BlackBerry (NYSE: BB; TSX: BB) provides intelligent security software and services to enterprises and governments around the world. The company secures more than 500M endpoints including 195M vehicles. Based in Waterloo, Ontario, the company leverages AI and machine learning to deliver innovative solutions in the areas of cybersecurity, safety, and data privacy solutions, and is a leader in the areas of endpoint security, endpoint management, encryption, and embedded systems. BlackBerry’s vision is clear – to secure a connected future you can trust.
BlackBerry. Intelligent Security. Everywhere.
For more information, visit BlackBerry.com and follow @BlackBerry.