BlackBerry entered patent sale transaction with Malikie for up to $900M
by CM staff
Funding has been secured from a leading US-based investment firm, with in excess of $30 billion of assets under management.
WATERLOO — BlackBerry Limited entered into an agreement to sell substantially all of its non-core patents and patent applications to Malikie Innovations Limited, a newly-formed subsidiary of Key Patent Innovations Limited (KPI), an intellectual property monetization company, for a combination of cash at closing and potential future royalties in the aggregate amount of up to $900 million.
The transaction is not subject to any financing conditions. Funding has been secured from a leading US-based investment firm, with in excess of $30 billion of assets under management.
“We’re extremely pleased to have executed this agreement with KPI, whose industry-leading expertise and experience positions them well to realize the patent portfolio’s potential and enhance returns for BlackBerry,” said John Chen, Executive Chairman & CEO, BlackBerry. “This transaction, once complete, will further strengthen our balance sheet while simplifying our business and enabling increased focus on our core IoT and Cybersecurity opportunities.”
Under the terms of the agreement, BlackBerry will receive $170 million in cash on closing and an additional $30 million in cash by no later than the third anniversary of closing. BlackBerry will also be entitled to receive annual cash royalties from the profits generated from the BlackBerry patents.
Royalty payments to BlackBerry will initially be capped at $700 million, subject to an annual cap increase of an amount equal to 4 per cent of the remaining portion of the $700 million that has not been paid to BlackBerry as of the date of the increase. Malikie’s costs will also be capped in the calculation of profits generated.
Approximately 32,000 patents and applications relating primarily to mobile devices, messaging and wireless networking will be sold in the transaction with Malikie. The transaction excludes patents and applications that are necessary to support BlackBerry’s current core business operations. It also excludes approximately 120 monetizable non-core patent families relating to mobile devices (representing approximately 2,000 patents and applications which are primarily standards essential), as well as all existing revenue generating agreements.
