The Chefs’ Warehouse Announces Offering of $250 Million of Convertible Senior Notes Due 2028
December 07 2022 - 04:01PM
The Chefs’ Warehouse, Inc. (NASDAQ: CHEF) (the “Company”) today
announced that it intends to offer, subject to market conditions
and other factors, $250 million aggregate principal amount of its
convertible senior notes due 2028 (the “Convertible Notes”) in a
private placement to qualified institutional buyers pursuant to
Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”). The Company also intends to grant the initial
purchasers of the Convertible Notes an option to purchase, for
settlement within a period of 13 days from, and including, the date
the Convertible Notes are first issued, up to an additional $37.5
million aggregate principal amount of Convertible Notes. The
Convertible Notes are expected to pay interest semiannually. During
certain periods or if certain conditions are satisfied, the
Convertible Notes will be convertible at the option of holders of
the Convertible Notes into shares of the Company’s common stock,
cash or a combination of cash and the Company’s common stock, at
the Company’s election. The Convertible Notes will mature on
December 15, 2028, unless earlier converted, redeemed or
repurchased in accordance with their terms. Final terms of the
Convertible Notes, including the interest rate, initial conversion
rate, and redemption and other terms, will be determined by
negotiations between the Company and the initial purchasers of the
Convertible Notes.
The Company expects to use a portion of the net
proceeds from the offering to pay the cash portion of the
consideration in the concurrent exchange transactions described
below. The Company intends to use the remainder of the net proceeds
from the offering for general corporate purposes.
Concurrently with the offering, in separate,
privately negotiated transactions, the Company expects to enter
into exchange agreements with a limited number of holders of its
1.875% convertible senior notes due 2024 (the “existing convertible
notes”) to exchange a portion of the outstanding existing
convertible notes for a combination of cash and shares of the
Company’s common stock. Following the completion of the offering,
the Company may engage in additional exchanges, or the Company may
repurchase or induce conversions, of the existing convertible
notes. Holders of the existing convertible notes that participate
in any of these exchanges, repurchases or induced conversions may
purchase or sell shares of the Company’s common stock in the open
market to unwind any hedge positions they may have with respect to
the existing convertible notes or to hedge their exposure in
connection with these transactions. These activities may adversely
affect the trading price of the Company’s common stock and the
notes the Company is offering. Moreover, market activities by
holders of the existing convertible notes that participate in the
concurrent exchanges may impact the initial conversion price of the
notes the Company is offering.
This press release is neither an offer to sell
nor a solicitation of an offer to buy the Convertible Notes or the
shares of the Company’s common stock, if any, issuable upon
conversion of the Convertible Notes or issuable in the proposed
exchange transactions described above, nor will there be any sale
of these securities in any state or jurisdiction in which such an
offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
state or jurisdiction.
The offer and sale of the Convertible Notes and
the shares of the Company’s common stock, if any, issuable upon
conversion of the Convertible Notes or issuable in the proposed
exchange transactions described above have not been and will not be
registered under the Securities Act, or the securities laws of any
other jurisdiction, and may not be offered or sold in the United
States absent registration or an applicable exemption from
registration requirements.
About The Chefs’ Warehouse
The Chefs’ Warehouse, Inc. is a premier
distributor of specialty food products in the United States, Canada
and the Middle East focused on serving the specific needs of chefs
who own and/or operate some of the nation’s leading menu-driven
independent restaurants, fine dining establishments, country clubs,
hotels, caterers, culinary schools, bakeries, patisseries,
chocolateries, cruise lines, casinos and specialty food stores. The
Chefs’ Warehouse, Inc. carries and distributes more than 50,000
products to more than 35,000 customer locations throughout the
United States, Canada and the Middle East.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
and Section 21E of the Securities and Exchange Act of 1934 that
involve risks and uncertainties and are based on current
expectations and management estimates; actual results may differ
materially. The risks and uncertainties which could impact these
statements include, but are not limited to, risks related to
whether the Company will consummate the offering of the Convertible
Notes or the proposed exchange transactions on the expected terms,
or at all, the anticipated principal amount of the Convertible
Notes, prevailing market and other general economic conditions, and
the fact that the Company’s management will have broad discretion
in the use of the proceeds from any sale of the Convertible Notes.
The foregoing list of risks and uncertainties is illustrative, but
is not exhaustive. A more detailed description of other potential
risk factors that could affect the Company’s business and financial
results is contained in the Company’s most recent annual report on
Form 10-K filed with the Securities and Exchange Commission (“SEC”)
on February 22, 2022 and other reports filed by the Company with
the SEC since that date. The Company is not undertaking to update
any information except as required by applicable laws.
Contact:Investor RelationsJim
Leddy, CFO, (718) 684-8415
Chefs Warehouse (NASDAQ:CHEF)
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