Blackline Safety to be acquired by Francisco Partners for up to C$850M

Blackline Safety (BLKLF) entered into a definitive arrangement agreement with an affiliate of Francisco Partners Management, pursuant to which the Purchaser will acquire all of the issued and outstanding common shares of the Company for up to C$9.50 per Share, comprised of C$9.00 per Share in cash on closing plus a contingent value right of up to C$0.50 per Share. The Cash Consideration and Total Consideration represent an aggregate fully diluted equity value of approximately C$804M and C$850M respectively, based on 100% of the Company’s Shares and excluding the impact of Rollover Shares. The Cash Consideration and Total Consideration represent premiums of approximately 27% and 34%, respectively, to the closing price of the Shares on the Toronto Stock Exchange on April 7, the last trading date prior to the announcement of the Transaction, and of approximately 28% and 35%, respectively, to the 20-day volume weighted average price per Share on the TSX as of the end of trading on April 7. In connection with the Transaction, DAK Capital, the Lowy Family Group, Cody Slater, the Chairman and CEO of the Company, and Brad Gilewich, President of DAK and a nominee director of the Company, and certain of their affiliates have entered into equity rollover agreements with the Purchaser pursuant to which they have agreed to exchange all or a portion of their Shares for shares of the Purchaser or an affiliate thereof. The approximately 26.7M Rollover Shares subject to the equity rollover agreements represent approximately 31% of the issued and outstanding Shares. Blackline’s Board of Directors, with interested directors abstaining, has unanimously recommended that Blackline shareholders vote in favour of the Transaction. The recommendation follows the unanimous recommendation of a special committee of the Board, comprised solely of independent directors, that was formed in connection with, among other things, the review of strategic alternatives for the Company, and after the Special Committee and the Board had each determined that the Transaction is fair to the holders of the Shares and is in the best interests of the Company. Pursuant to the Arrangement Agreement, the Purchaser will acquire all of the Shares for C$9.00 per Share in cash at closing plus one CVR per Share. Each CVR will entitle the holder thereof to an additional cash payment if the Company’s annualized recurring revenue for the month ended October 31, 2027 is equal to or greater than C$145M. If the Calculated ARR is equal to or greater than C$148.9M, each CVR will entitle the holder thereof to a maximum cash payment of C$0.50. If the Calculated ARR is between C$145M and C$148.9M, each CVR will entitle the holder thereof to a cash payment between C$0.375 and C$0.50 based on a linear interpolation of the Calculated ARR. If the Calculated ARR is less than C$145M, holders of CVRs will not be entitled to any payment in respect of their CVRs. For the Company’s latest quarter ending January 31, 2026, ARR was C$90.5M. Each CVR will be a direct obligation of the Purchaser. The CVRs will not be listed on any market or exchange, and may not be sold, assigned, transferred, pledged or encumbered in any manner, other than in limited circumstances. The CVRs will not represent any equity or ownership interest in the Company, Purchaser or any affiliate thereof and will not be represented by any certificates or other instruments. The CVRs will not have any voting or dividend rights, and no interest will accrue on any amounts payable on the CVRs to any holder thereof. Pursuant to the Arrangement Agreement, Blackline is subject to customary non-solicitation provisions; however, the Board retains the ability to consider, respond to and, subject to specified conditions, accept an unsolicited bona fide “superior proposal” in accordance with its fiduciary duties. Any such proposal is subject to a defined notice and matching process that provides the Purchaser with a right to match within five business days. The Arrangement Agreement also includes customary deal-protection provisions, including a termination payment of C$30.6M payable by Blackline in certain circumstances, a reverse termination payment of C$56.3M payable by the Purchaser in specified circumstances, and a capped expense reimbursement of up to C$4M payable to the Purchaser in limited circumstances. The Rollover Shares represent approximately 31% of the issued and outstanding Shares. All rollovers will occur at a value not to exceed the Cash Consideration per Share. The Rollover Shareholders have agreed to forego any CVR consideration for their Rollover Shares.In connection with the Transaction, the Rollover Shareholders have agreed to contribute an aggregate of approximately C$45M to an affiliate of the Purchaser to fund, in part, the Cash Consideration payable in connection with the Transaction and certain other transaction expenses. The Transaction is not subject to any financing condition and is expected to close in the second calendar quarter of 2026.