Kneat Files Management Information Circular in Connection with the Previously Announced Thoma Bravo Transaction

Executive Summary

• Kneat.com, inc. has filed its management information circular and commenced mailing it to shareholders in connection with a Special Meeting of Shareholders scheduled for July 30, 2026, to vote on a proposed arrangement agreement to be acquired by an affiliate of Thoma Bravo, L.P.
• The Board of Directors unanimously recommends that shareholders vote FOR the transaction, citing it as the best risk-adjusted path forward and a way to transfer macroeconomic and operational risks to the buyer.
• The transaction values Kneat at an enterprise value of C$622 million, representing a significant premium to recent trading prices and exceeding median multiples of other recent North American software take-private transactions.

Key Details

• Transaction Structure: Kneat will be acquired by an affiliate of Thoma Bravo, L.P. via a court-approved arrangement agreement.
• Consideration: C$6.50 per share in cash.
• Enterprise Value: C$622 million.
• Valuation Multiples:
  • Approximately 7.2x Next Twelve Months (NTM) revenue.
  • Approximately 9.3x Last Twelve Months (LTM) revenue (based on LTM revenue of $67 million as of March 31, 2026).
• Premiums:
  • 40% premium to the closing price on May 8, 2026 (last trading day prior to the announcement of the strategic review).
  • 20% premium to the closing price on June 5, 2026 (last trading day prior to the transaction announcement).
  • 57% premium to the 30-day VWAP, 61% to the 60-day VWAP, and 54% to the 90-day VWAP as of May 8, 2026.
• Strategic Review Process:
  • Led by an independent Special Committee.
  • Engaged with 36 financial sponsors and 10 strategic buyers.
  • 34 sponsors and 2 strategic buyers signed NDAs and received due diligence materials.
  • 18 interested parties engaged via meetings; 12 submitted indicative offers.
  • Multiple rounds of negotiation resulted in a material increase to Thoma Bravo's bid.
• Shareholder Meeting Details:
  • Date: July 30, 2026, at 10:00 a.m. Toronto time.
  • Record Date: June 25, 2026.
  • Voting Deadline: July 28, 2026, at 10:00 a.m. Toronto time.
• Regulatory Status: The Ontario Superior Court of Justice (Commercial List) granted a favorable interim order on June 26, 2026, authorizing the holding of the Meeting and the mailing of the Circular.
• Company Risks Cited for Transaction:
  • ARR growth deceleration (from 51% in Q1 2025 to 20% in Q1 2026).
  • Intensifying competitive pressure from established enterprise software vendors.
  • Ongoing unprofitability due to R&D, sales, and G&A investments.
  • High customer concentration (top 10 customers account for ~50% of revenue).
  • Stock price had declined ~35% from all-time highs prior to the strategic review announcement.

Notable Quotes

• "The Kneat Board of Directors (the “Board”) believes the proposed transaction with Thoma Bravo (the “Proposed Transaction”) is in the best interests of the Company and maximizes value for shareholders."
• "The Proposed Transaction delivers significant and immediate value to shareholders at a time when Kneat is facing a range of macroeconomic headwinds and operational challenges that, collectively, create substantial risk for the Company’s standalone path."
• "The Proposed Transaction transfers these macroeconomic and operational risks to the buyer, allowing shareholders to benefit from certain and immediate cash for their stock at a substantial premium."