Effective Purchase Price Equal to $10.00 for
One Share of Class A Common Stock Plus Associated Warrants
Proceeds Expected to Fund Growth Strategy, ESG
Framework, and Employee Benefits
Blue Apron Also Announces Certain Board
Changes, and Collapse of Multiclass Voting Structure
Blue Apron Holdings, Inc. (NYSE: APRN) today announced $78.0
million of a planned equity capital raise, including a $45.0
million fully backstopped rights offering to holders of its Class A
common stock and holders of certain warrants to purchase Class A
common stock, a private placement with the backstop provider, an
entity affiliated with Joseph N. Sanberg, for gross proceeds of
$30.0 million, which will close promptly following the consummation
of the rights offering subject to customary closing conditions, and
the closing of a $3.0 million private placement with Matthew B.
Salzberg, the company’s co-founder. In connection with the equity
capital raise, Blue Apron is also announcing certain changes to its
board of directors and capital structure.
Fully Backstopped Rights Offering and Related Private
Placements
Pursuant to the terms of the fully backstopped rights offering,
the company intends to issue, for no consideration,
non-transferable subscription rights, which will entitle eligible
holders as of the record date to purchase their pro rata amount of
$45.0 million of (i) shares of Class A common stock, (ii) warrants
to purchase additional shares of Class A common stock at an
exercise price of $15.00 per share, (iii) warrants to purchase
additional shares of Class A common stock at an exercise price of
$18.00 per share, and (iv) warrants to purchase additional shares
of Class A common stock at an exercise price of $20.00 per
share.
The warrants will have a term of seven years from the date of
issuance. No fractional shares of Class A common stock will be
issued in the rights offering, or upon exercise of the warrants.
Participants in the proposed rights offering will need to exercise
multiple rights and pay an aggregate subscription price of at least
$10.00 to participate in the rights offering and for each $10.00
will receive one share of Class A common stock, as well as the
ratios of associated warrants—one warrant for 0.8 of one share with
a $15.00 exercise price per share, one warrant for 0.4 of one share
with a $18.00 exercise price per share, and one warrant for 0.2 of
one share with a $20.00 exercise price per share.
The company has entered into a purchase agreement with RJB
Partners LLC, a Class A stockholder and an affiliate of Joseph N.
Sanberg, a founding investor of the company, and Matthew B.
Salzberg, a co-founder of the company. Joseph N. Sanberg proposed
an investment of up to $75.0 million in the company in the form of
a private placement (the “Concurrent Private Placement”) and agreed
to make $45.0 million of the investment available to the company’s
existing stockholders and to backstop that amount in full. Pursuant
to the terms of the purchase agreement, RJB Partners LLC has agreed
to purchase in the Concurrent Private Placement, on the same terms
as the rights offering and for an aggregate purchase price of $30.0
million, (i) 3,000,000 shares of Class A common stock, (ii)
warrants to purchase 2,400,000 shares of Class A common stock at an
exercise price of $15.00 per share, (iii) warrants to purchase
1,200,000 shares of Class A common stock at an exercise price of
$18.00 per share, and (iv) warrants to purchase 600,000 shares of
Class A common stock at an exercise price of $20.00 per share. The
purchase agreement also commits RJB Partners LLC to purchase in a
private placement (the “Backstop Private Placement”), any and all
shares of Class A common stock and warrants that remain
unsubscribed for in the rights offering for an aggregate purchase
price equal to $45.0 million less the aggregate gross proceeds
received from participants in the rights offering. Pursuant to the
terms of the purchase agreement, the Backstop Private Placement and
Concurrent Private Placement are expected to close concurrently,
shortly after the expiration of the rights offering subscription
period. Under the purchase agreement, the company has agreed to
provide RJB Partners LLC with certain customary registration rights
with respect to the securities purchased in the Backstop Private
Placement and Concurrent Private Placement.
Pursuant to the terms of the purchase agreement, the company
also sold to Matthew B. Salzberg (the “Salzberg Private
Placement”), on the same terms as the proposed rights offering,
Backstop Private Placement and Concurrent Private Placement and for
aggregate gross proceeds of $3.0 million, (i) 300,000 shares of
Class A common stock, (ii) warrants to purchase 240,000 shares of
Class A common stock at an exercise price of $15.00 per share,
(iii) warrants to purchase 120,000 shares of Class A common stock
at an exercise price of $18.00 per share, and (iv) warrants to
purchase 60,000 shares of Class A common stock at an exercise price
of $20.00 per share. The Salzberg Private Placement closed
concurrently with signing the purchase agreement. Under the
purchase agreement, the company has agreed to provide Matthew B.
Salzberg with certain customary registration rights with respect to
the securities purchased in the Salzberg Private Placement.
RJB Partners LLC’s obligation to purchase the securities
pursuant to the purchase agreement and to fulfill its backstop
commitment and the company’s obligation to issue the securities in
the Concurrent Private Placement and the Backstop Private Placement
are subject to certain customary closing conditions, including
completion of the proposed rights offering. The rights offering,
Backstop Private Placement and Concurrent Private Placement are
expected to close in the fourth quarter of 2021.
Because the company must register the rights offering with the
U.S. Securities and Exchange Commission (the “SEC”), no record date
has been set yet. Additional information about the proposed rights
offering and related transactions will be contained in the
registration statement and in a Current Report on Form 8-K to be
filed with the SEC, including a copy of the purchase agreement.
The securities to be offered in the proposed rights offering,
proposed Backstop Private Placement and proposed Concurrent Private
Placement have not been registered under the Securities Act of
1933, as amended (the “Securities Act”). The company intends to
file with the SEC a registration statement under the Securities Act
relating to the proposed rights offering as soon as practicable.
The securities to be offered in the proposed rights offering may
not be offered or sold nor may offers to buy be accepted prior to
the time the registration statement has become effective. The
proposed rights offering, which is expected to commence following
the effectiveness of the registration statement, will only be made
by means of a prospectus to be filed as part of the registration
statement. The terms of the proposed rights offering, including
subscription price, the record date for the distribution of the
subscription rights and the subscription period, will be included
in the prospectus.
Use of Proceeds
The company plans to use the net proceeds of the rights
offering, Backstop Private Placement, Concurrent Private Placement
and Salzberg Private Placement to:
- accelerate its growth strategy to drive revenue and customer
growth;
- build a framework to establish an ESG program and advance its
sustainability goals; including achieving carbon neutrality targets
by early 2022; and
- increase wages, benefits and training for its hourly
employees.
The company is also permitted by the terms of the purchase
agreement to use the proceeds of the transactions to repay up to
$5.0 million of outstanding indebtedness.
Board Changes; Collapse of Multiclass Voting
Structure
In connection with the Salzberg Private Placement and the
proposed transactions, Matthew B. Salzberg, the company’s
co-founder and board chair, and Barry Salzberg, have resigned from
the company’s board of directors to focus on their other board
roles and business interests. The company appreciates Matthew B.
Salzberg’s and Barry Salzberg’s dedication to the company and
continued support. The board of directors has appointed Jennifer
Carr-Smith, a current independent board member, to succeed Matthew
B. Salzberg as board chair.
Further, in connection with the rights offering and related
financing transactions, certain of Blue Apron’s existing holders of
Class B common stock, including Matthew B. Salzberg, Barry
Salzberg, Joseph N. Sanberg, and certain of their respective
affiliates, have converted their shares of Class B common stock,
each share of which is entitled to 10 votes per share, to shares of
the company’s Class A common stock, which is entitled to one vote
per share. As a result of these conversions, pursuant to the
company’s restated certificate of incorporation, as amended, which
provides for the automatic conversion of all outstanding shares of
Class B common stock when the outstanding shares of Class B common
stock represent less than 5% of the combined voting power of the
outstanding shares of Class A common stock and Class B common
stock, each outstanding share of Blue Apron’s Class B common stock
automatically converted into one share of Class A common stock. As
a result, effective immediately, Blue Apron only has one class of
common stock outstanding, Class A common stock, each share of which
is entitled to one vote.
Advisors
Wilmer Cutler Pickering Hale and Dorr LLP is acting as legal
advisor to Blue Apron in connection with the transactions. Sullivan
& Cromwell LLP is acting as legal advisor to RJB Partners LLC
and Joseph N. Sanberg in connection with the transactions.
Other Important Information
The securities sold in the Salzberg Private Placement, and to be
sold in the proposed rights offering, proposed Backstop Private
Placement and proposed Concurrent Private Placement, have not been
registered under the Securities Act or the securities laws of any
state or other applicable jurisdiction, and may not be offered or
sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act
and applicable state or other jurisdictions’ securities laws.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy the securities issued in the
Salzberg Private Placement or the securities to be issued in the
proposed rights offering, proposed Backstop Private Placement and
proposed Concurrent Private Placement, nor shall there be any
offer, solicitation or sale of these securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful. Any
offering of the securities under the registration statement related
to the rights offering or the resale registration statements
related to the private placements will only be made by means of a
prospectus.
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.
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 rights
offering, the transactions contemplated by the purchase agreement,
the anticipated final terms, timing and completion of the proposed
rights offering, proposed Backstop Private Placement and proposed
Concurrent Private Placement, the use of proceeds from the proposed
rights offering, proposed Backstop Private Placement, proposed
Concurrent Private Placement and completed Salzberg Private
Placement, 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 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, proposed Backstop Private Placement and proposed
Concurrent Private Placement; 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 to be filed
with the SEC, 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,
proposed Backstop Private Placement and proposed Concurrent Private
Placement 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210915006009/en/
Media Contact Muriel Lussier Blue Apron
muriel.lussier@blueapron.com
Investor Contact investor.relations@blueapron.com
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