kneat.com, inc., the global leader in digital validation and quality process automation, is pleased to announce that it has entered into a definitive arrangement agreement (the “Arrangement Agreement”) with an affiliate of Thoma Bravo, L.P. (“Thoma Bravo” or the “Purchaser”), the world’s largest software-focused investment firm, whereby the Purchaser will acquire all of the issued and outstanding common shares (the “Shares”) of the Company, subject to obtaining shareholder and other customary approvals (the “Transaction”). Under the terms of the Arrangement Agreement, holders of the outstanding Shares of the Company (other than any Rollover Shares (as defined below)) will receive C$6.50 cash per share (the “Purchase Price”), representing an aggregate total equity value of approximately C$650 million on a fully diluted, in-the-money, treasury-stock-method basis and inclusive of Rollover Shares. Upon completion of the Transaction, Kneat will become a privately held company.
The Purchase Price represents a premium of approximately 40% to the closing price of the Shares on the Toronto Stock Exchange (the “TSX”) on May 8, 2026, the last trading day prior to Kneat announcing an ongoing strategic review, and a premium of approximately 20% to the closing price on June 5, 2026, the last trading day prior to the announcement of the Transaction.
Kneat’s platform is designed to digitize data specifically for integrity and traceability, which is central to validation and compliance in the life sciences sector. For customers, this makes Kneat's platform a critical foundation for the confident deployment of Artificial Intelligence (“AI”) across regulated environments. Following the closing of the Transaction, Thoma Bravo intends to accelerate Kneat’s pursuit of its mission to enable any regulated company to be confident it is developing, manufacturing, and delivering its products to the highest safety standard.
“This Transaction represents the culmination of a comprehensive strategic review process undertaken by the Kneat Board of Directors, which has led to a compelling outcome for our Shareholders,” said Carol Leaman, Chair of the special committee of independent directors of Kneat (the “Special Committee”) that oversaw the Transaction. “We are pleased to have reached an agreement that provides Shareholders with significant, immediate, and certain value. This Transaction recognizes the strength of Kneat’s market position, the quality of its platform, and the long-term value created by the management team and employees.”
“We are thrilled to partner with Thoma Bravo, who we are confident will help us accelerate our mission and our position as the leader in digital validation and quality process automation for life sciences at an exciting time for the industry,” said Eddie Ryan, CEO and co-founder of Kneat. “As we begin to leverage our critical position in validation to enable customers to expand their use of our platform to adjacent areas, having the sector expertise, strategic alignment, and resources of Thoma Bravo behind us will be a powerful catalyst. We are energized by the path we are announcing today which delivers value to all our stakeholders.”
“In today’s increasingly complex regulatory environment, more customers are looking to Kneat to provide them with greater control, efficiency, and real-time visibility across mission-critical compliance workflows,” said Adam Solomon, a Partner at Thoma Bravo. “We are confident we can apply our operational expertise and deep experience working with market-leading software companies to accelerate Kneat’s growth.”
“We are thrilled to back Eddie and the team at Kneat as they continue to build on their leadership position in digital validation,” said Chandler Gay, a Senior Vice President at Thoma Bravo. “Kneat is an exceptional company that is loved by its customers, and we are proud to be partnering with their team.”
Transaction Details
The Company entered into the Arrangement Agreement based on the unanimous approval of the Company’s board of directors (the “Board”) and the unanimous recommendation of the Special Committee, that the Transaction is fair from a financial point of view to the holders of the Shares (the “Shareholders”) (other than any Rolling Shareholders), and is in the best interests of the Company. The Arrangement Agreement was the result of a comprehensive strategic review and negotiation process that was undertaken at arm’s length with the oversight and participation of the Special Committee advised by independent and highly qualified legal and financial advisors. See “Unanimous Board Approval” below.
Thoma Bravo and certain existing director and management shareholders of Kneat (“Rolling Shareholders”) may elect for such Rolling Shareholders to roll a portion of their equity into shares of the Purchaser or an affiliate of the Purchaser, however the terms of any such rollover (including which Shareholders may be Rolling Shareholders or how many Shares may be rolled over) have not been negotiated at this time. Any shares rolled over (the “Rollover Shares”) would be at a value equal to the Purchase Price. Any Shares owned by the Rolling Shareholders that are not Rollover Shares will be sold to Thoma Bravo at the Purchase Price.
Unanimous Board Approval
The Board unanimously approved the Arrangement Agreement following receipt of the unanimous recommendation of the Special Committee. The Special Committee was appointed by the Board to, among other matters, review strategic alternatives for the Company including the Transaction, consider the Company’s best interests and the implications to Shareholders and other stakeholders, oversee the evaluation and negotiation of the transaction proposals and provide the Board with advice and recommendations with respect to the Transaction. As such, the Board unanimously recommends that Shareholders vote in favour of the Transaction. The Company intends to hold a special meeting of Shareholders (the “Shareholders’ Meeting”) by early August 2026, at which the Transaction will be considered and voted upon by Shareholders of record.
In making its determination to unanimously recommend approval of the Transaction to the Board, the Special Committee and, in the Board’s determination to approve the Transaction, the Board, considered, among other things, the following reasons for the Transaction:
- Significant Premium to Market – the Purchase Price represents a premium of approximately 40% to the closing price of the Shares on the TSX on May 8, 2026, the last trading day prior to Kneat announcing an ongoing strategic review, and a premium of approximately 20% to the closing price on June 5, 2026, the last trading day prior to the announcement of the Transaction;
- Certainty of Value and Immediate Liquidity – the all-cash consideration provides Shareholders certainty of value and immediate liquidity, and is of particular benefit given the limited trading and lack of liquidity in the Shares;
- Sale Process – the Company, with the assistance of CIBC World Markets Inc. (“CIBC Capital Markets”) and under the supervision of the Special Committee, conducted a comprehensive sale process as part of its strategic review, which resulted in the Transaction. The Special Committee and the Board assessed the relative benefits and risks of various alternatives reasonably available to the Company, including the other transaction proposals received in the strategic review process and continued execution of the Company’s existing strategic plan as a public company. As a result of that process, the Special Committee and the Board unanimously concluded that the Transaction represents greater value for the Company and its Shareholders (other than any Rolling Shareholders) than would reasonably be expected from any other transaction proposal or the continued execution of the Company’s strategic plan as a public company. The Special Committee and the Board continually assessed each reasonably available alternative throughout the strategic review process and concluded that entering into the Arrangement Agreement with the Purchaser was the most favourable alternative reasonably available;
- Fairness Opinions – receipt of the fairness opinions from each of CIBC Capital Markets and ATB Cormark Capital Markets (“ATB Cormark”) which each concluded that, based upon and subject to the assumptions, limitations and qualifications set out in their respective opinions, the consideration to be received by the Shareholders (other than any Rolling Shareholders) pursuant to the Arrangement Agreement is fair, from a financial point of view, to such Shareholders;
- High Likelihood of Completion – Thoma Bravo is a large, credible, and reputable private equity sponsor, with demonstrated creditworthiness and the ability to fund and successfully complete transactions. The Transaction is subject to a limited number of customary conditions (which do not include any financing or due diligence conditions) that the Special Committee and Board believe are reasonable in the circumstances;
- Arrangement Agreement Terms – the Arrangement Agreement is the result of a comprehensive negotiation process that was undertaken at arm’s length with the oversight and participation of the Special Committee advised by independent and highly qualified legal and financial advisors and resulted in terms and conditions that are reasonable in the judgment of the Special Committee and the Board, including a customary “fiduciary out” that will permit the Company to enter into a Superior Proposal (as defined in the Arrangement Agreement) in certain circumstances;
- Break Fee – the break fee payable by the Company of approximately C$22.6 million is reasonable in the circumstances and only payable in customary and limited circumstances;
- Minority Vote and Court Approval – the Transaction must be approved by not only two-thirds of the votes cast by Shareholders, but also, if required, by a majority of the minority in accordance with Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), and by the Ontario Superior Court of Justice (Commercial List), which will consider the fairness and reasonableness of the Transaction to all Shareholders; and
- Support for the Transaction from Directors and Officers – as described below, all of the directors and officers of the Company who hold Shares have entered into voting and support agreements, pursuant to which they have agreed to, among other things, vote in favour of the Transaction at the Shareholders’ Meeting.
Opinions
In connection with their review and consideration of the Transaction, the Special Committee engaged CIBC Capital Markets as its financial advisor in respect of the Transaction and ATB Cormark as its independent fairness opinion provider in respect of the Transaction. Each of CIBC Capital Markets and ATB Cormark provided a verbal opinion to the Special Committee that, based upon and subject to the assumptions, limitations and qualifications set out in their respective written opinions, the consideration to be received by the Shareholders (other than any Rolling Shareholders) pursuant to the Arrangement Agreement is fair, from a financial point of view, to such Shareholders.
Additional Transaction Details
Pursuant to the terms of the Arrangement Agreement, the Purchaser will acquire (i) all of the Shares, other than any Rollover Shares, for a cash payment of C$6.50 per Share, and (ii) the Rollover Shares, if any, will be exchanged for shares of the Purchaser or an affiliate of the Purchaser at the Purchase Price on terms to be negotiated following the execution of the Arrangement Agreement.
The Transaction is to be completed by way of a plan of arrangement under the Canada Business Corporations Act and will constitute a “business combination” for purposes of MI 61-101. The Transaction is subject to certain approvals by Shareholders at the Shareholders’ Meeting, including by: (i) at least two-thirds of the votes cast by all Shareholders present or represented by proxy at the Shareholders’ Meeting (with each shareholder being entitled to one vote per share); and (ii) if applicable, a simple majority of the votes cast by Shareholders (excluding the Shares held by any Shareholders required to be excluded pursuant to MI 61-101). Completion of the Transaction is subject to other customary conditions, including receipt of Court and regulatory approvals. The Transaction is not subject to a financing condition. Assuming the timely receipt of all required approvals, the Transaction is expected to close in the third quarter of 2026.
The Arrangement Agreement includes customary non-solicitation provisions, which are subject to customary "fiduciary out" provisions that entitle the Company, subject to certain conditions, including the payment of the break fee, to terminate the Arrangement Agreement and accept an unsolicited Superior Proposal if the Purchaser does not match the Superior Proposal.
Following completion of the Transaction, it is expected that the Shares will be delisted from the TSX and the Company will cease to be a reporting issuer in all applicable Canadian jurisdictions.
Voting Agreements
Each of the directors and officers of the Company who hold Shares have agreed to vote their Shares in favour of the Transaction pursuant to voting and support agreements. The Shares represented by the parties to the voting and support agreements represent approximately 21.9% of the outstanding Shares.
Further information regarding the Transaction, the Arrangement Agreement and the Shareholders’ Meeting, including a copy of CIBC Capital Markets’ fairness opinion and ATB Cormark’s fairness opinion, will be included in the management information circular expected to be mailed to Shareholders of record in June 2026. Copies of the Arrangement Agreement, the forms of voting and support agreements and proxy materials in respect of the Shareholders’ Meeting will be available on the Company’s SEDAR+ profile at www.sedarplus.ca.
Advisors
CIBC Capital Markets is acting as exclusive financial advisor to the Special Committee. ATB Cormark is acting as an independent fairness opinion provider to the Special Committee. Fogler, Rubinoff LLP is acting as legal advisor to the Company. Dentons Canada LLP is acting as legal advisor to the Special Committee. Scotiabank is acting as financial advisor to Thoma Bravo. Kirkland & Ellis LLP is acting as U.S. legal advisor and Goodmans LLP is acting as Canadian legal advisor to Thoma Bravo.
