- Company plans to use proceeds to support accelerated growth
strategy, adopt new initiatives to benefit employees, and build
upon its ESG program
- Dual class stock structure eliminated in connection with
planned capital raise
- Blue Apron intends to further diversify board composition
following 2022 annual meeting
Blue Apron Holdings, Inc. (NYSE: APRN) today filed a
registration statement with the Securities and Exchange Commission
(“SEC”) for its previously announced proposed fully backstopped
equity rights offering, which represents $45.0 million of its
planned $78.0 million capital raise.
As part of the $78.0 million capital raise, the company
previously disclosed a planned $30.0 million investment by RJB
Partners LLC, an affiliate of Joseph N. Sanberg, and a $3.0 million
investment by Matthew B. Salzberg, Blue Apron’s co-founder and
former board chair, on the same terms as the rights offering. RJB
Partners LLC is also the backstop provider in the rights
offering.
Each of the transactions included in the capital raise is
structured to include a combination of shares of Class A common
stock and associated warrants, and is priced at an effective
purchase price of $10.00 for one share of Class A common stock plus
the associated warrants, as described below. As of September 14,
2021, the date prior to the announcement of the transactions, the
closing price of the Class A common stock on the New York Stock
Exchange was $3.88 per share.
Blue Apron intends to use the net proceeds of the full capital
raise for working capital and general corporate purposes, including
to accelerate its growth strategy to drive new customers and
associated revenue growth. The company is also permitted by the
terms of the purchase agreement to repay up to $5.0 million of
outstanding indebtedness with capital raise proceeds.
In addition, the company has committed to establishing and
implementing certain new initiatives to build on its ESG program,
including plans to achieve carbon neutrality targets by early 2022.
The company also plans to increase wages, benefits and training for
its hourly employees.
Further, under the terms of the purchase agreement, Blue Apron
agreed to use reasonable best efforts to implement a number of
corporate governance reforms. In connection with the transactions,
effective as of September 15, 2021, Blue Apron’s dual-class capital
structure was eliminated. Other governance reforms include using
reasonable best efforts to have the board of directors composed of
at least 50% women and at least 50% persons of color following the
company’s 2022 annual stockholders meeting. These planned
governance initiatives follow the declassification of the board of
directors that was approved earlier this year.
Matthew B. Salzberg’s investment closed on September 15, 2021,
and the other transactions are expected to close in the fourth
quarter of 2021.
Proposed Rights Offering
The public $45.0 million proposed rights offering consists of
subscription rights to purchase Class A common stock and associated
warrants offered to all existing shareholders on a pro rata basis
as of a yet to be determined record date. The company has included
the rights offering as part of its planned capital raise to enable
stockholders to participate pro rata in $45.0 million of the
capital raise on the same terms as RJB Partners LLC. Certain
directors, including Linda Findley Kozlowski and Elizabeth Huebner,
have indicated that they intend to exercise the subscription rights
they receive in the rights offering in full. The proposed offering
is fully backstopped by RJB Partners LLC under a purchase
agreement, which commits RJB Partners LLC to purchase any and all
unsubscribed shares of Class A common stock and warrants in the
rights offering, subject to certain customary closing conditions,
including completion of the proposed rights offering. This purchase
agreement also governs the RJB Partners LLC and Salzberg private
placements.
The subscription rights will entitle eligible holders to
purchase for an effective purchase price of $10.00 (i) one share of
Class A common stock, (ii) one seven-year warrant to purchase 0.8
of one additional share of Class A Common Stock at an exercise
price of $15.00 per share, (iii) one seven-year warrant to purchase
0.4 of one additional share of Class A Common Stock at an exercise
price of $18.00 per share, and (iv) one seven-year warrant to
purchase 0.2 of one additional share of Class A Common Stock at an
exercise price of $20.00 per share.
The subscription price for the proposed rights offering was
unanimously approved by the company’s board of directors based on
several considerations, including negotiations with RJB Partners
LLC regarding the backstop and the company’s financing needs.
Other Important Information
A registration statement relating to the proposed rights
offering has been filed with the SEC but has not yet become
effective. The proposed rights offering will be made pursuant to
such registration statement and a prospectus to be filed with the
SEC prior to the commencement of the proposed rights offering. The
securities may not be sold nor may offers to buy be accepted prior
to the time the registration statement becomes effective.
The information herein, including the expected terms of the
proposed rights offering, is not complete and is subject to change.
The company reserves the right to cancel or terminate the planned
rights offering at any time with the consent of RJB Partners LLC.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any subscription rights or any
other securities to be issued in the proposed rights offering or
any related transactions, nor shall there be any offer,
solicitation or sale of subscription rights or any other securities
in any jurisdiction in which such offer, solicitation or sale would
be unlawful.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of The Private Securities Litigation Reform Act of
1995. Such forward-looking statements include, but are not limited
to, those regarding the company’s plans to launch a fully
backstopped rights offering, the anticipated final terms, timing
and completion of the proposed rights offering and related backstop
and concurrent private placement, the use of proceeds from the
proposed rights offering and related backstop and related
financings, and the company’s plans, strategies, and prospects for
its business. The words “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intend,” “hope,” “may,” “plan,”
“possible,” “potential,” “predict,” “project,” “should,” “target,”
“would” and similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. Such statements are
subject to numerous important factors, risks and uncertainties that
may cause actual events or results to differ materially from
current expectations and beliefs, including, but not limited to:
risks and uncertainties related to: whether the proposed
transactions will be completed in a timely manner, or at all; the
risk that all of the closing conditions under the backstop purchase
agreement are not satisfied; the occurrence of any event, change or
other circumstance that could give rise to the termination of the
purchase agreement; the final terms of the proposed rights offering
and related backstop and related financings; market and other
conditions; the satisfaction of customary closing conditions
related to the proposed rights offering; risks related to the
diverting of management’s attention from Blue Apron’s ongoing
business operations; the impact of general economic, industry or
political conditions in the United States or internationally
including the ongoing COVID-19 pandemic and other important risk
factors set forth under the caption “Risk Factors” in the Form S-3
filed with the SEC on September 21, 2021, in Blue Apron’s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2021 and in any
other subsequent filings made with the SEC by Blue Apron. There can
be no assurance that Blue Apron will be able to complete the
proposed rights offering and related backstop or the related
financing transactions on the anticipated terms, or at all. Any
forward-looking statements contained in this press release speak
only as of the date hereof, and Blue Apron specifically disclaims
any obligation to update any forward-looking statement, whether as
a result of new information, future events or otherwise, except as
required by law.
About Blue Apron
Blue Apron’s vision is “better living through better food.”
Launched in 2012, Blue Apron offers fresh, chef-designed recipes
that empower home cooks to embrace their culinary curiosity and
challenge their abilities to see what a difference cooking quality
food can make in their lives. Through its mission to spark
discovery, connection and joy through cooking, Blue Apron
continuously focuses on bringing incredible recipes to its
customers, while minimizing its carbon footprint, reducing food
waste, and promoting diversity and inclusion.
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version on businesswire.com: https://www.businesswire.com/news/home/20210921005542/en/
Media Contact Muriel Lussier Blue Apron
muriel.lussier@blueapron.com Investor Contact
investor.relations@blueapron.com
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