Dutch Bros Inc. Announces Launch of Secondary Public Offering of Class A Common Stock
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Insights
The announcement of a registered underwritten public offering by certain selling stockholders of Dutch Bros Inc. represents a significant event for stakeholders and potential investors. The offering of 8,000,000 shares by TSG Consumer Partners, L.P. could potentially influence Dutch Bros' stock liquidity and market perception. The decision not to offer any new shares and the company's non-receipt of proceeds from the sale may indicate a strategic move by the selling stockholders to realize gains or diversify their portfolios without diluting existing shareholders.
It is also noteworthy that the selling stockholders expect to distribute in kind 383,363 securities convertible into common stock to certain indirect members. This action, coupled with the lock-up restrictions, suggests a measured approach to controlling the market impact of the share release. Investors should monitor the lock-up period as its expiration could lead to increased market volatility. Morgan Stanley's role as the sole underwriter provides a level of credibility to the offering, potentially attracting institutional investors.
The public offering by Dutch Bros Inc.'s selling stockholders is a strategic maneuver that reflects broader market trends. It is important to contextualize this event within the specialty coffee market, where competition is fierce and growth opportunities are often pursued through expansion and brand differentiation. The indirect members' choice to maintain their existing interests rather than participating in the offering signals confidence in the company's long-term prospects.
Furthermore, the costs associated with the sale, excluding underwriting discounts and commissions, borne by Dutch Bros, could impact its financials in the short term. However, the lack of capital inflow from the offering means that the company's operational strategy remains unchanged, which could reassure investors looking for stability in the company's growth trajectory.
The registration statement on Form S-3 and the use of a free writing prospectus, prospectus supplement and accompanying prospectus are standard SEC filing requirements for such offerings. These documents provide transparency into the company's financials and the offering's details, which is crucial for informed decision-making by investors. The effective filing of the shelf registration statement indicates Dutch Bros' preparedness for future securities offerings, which could be a sign of strategic financial planning. The legal framework governing this offering ensures that all material information is disclosed, reducing the risk of misinformation in the market.
Substantially concurrently with the consummation of this offering, the Selling Stockholders expect to distribute in kind 383,363 securities convertible into shares of Common Stock to certain of their indirect members who have elected to maintain their existing interests and to not participate in this offering. The shares distributed in kind will be subject to the lock-up restrictions described in the section titled “Underwriting” in the prospectus supplement. The offering is not conditioned upon the completion of distribution in kind.
Dutch Bros is not offering any shares of Common Stock in this offering and will not receive any proceeds from the sale of shares of Common Stock by the Selling Stockholders but will bear the costs associated with the sale of such shares, other than any underwriting discounts and commissions.
Morgan Stanley is acting as sole underwriter for the proposed offering.
A shelf registration statement on Form S-3 relating to Dutch Bros’ securities, including the Common Stock, has been filed with the SEC and became effective upon such filing. The proposed offering will be made only by means of a free writing prospectus, a prospectus supplement and an accompanying prospectus. Before you invest, you should read the prospectus supplement, the accompanying prospectus, the documents incorporated by reference therein and any other documents that Dutch Bros may file with the SEC for more complete information about Dutch Bros and the proposed offering. A copy of the prospectus supplement and the accompanying prospectus relating to the offering may be obtained, when available, by visiting the SEC’s website at www.sec.gov. Alternatively, copies of the prospectus supplement relating to the offering may be obtained, when available, by requesting it from: Morgan Stanley & Co. LLC, 180 Varick St., 2nd Floor,
This press release does not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any offer or sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.
About Dutch Bros Inc.
Dutch Bros Inc. (NYSE: BROS) is a high growth operator and franchisor of drive-thru shops that focus on serving high QUALITY, hand-crafted beverages with unparalleled SPEED and superior SERVICE. Founded in 1992 by brothers Dane and Travis Boersma, Dutch Bros began with a double-head espresso machine and a pushcart in
Forward-Looking Statements
In addition to historical information, this release contains a number of “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, the intended size and terms of the proposed offering of shares of Common Stock by the Selling Stockholders. These statements are based on Dutch Bros’ current expectations and beliefs, as well as a number of assumptions concerning future events. When used in this press release, the words “intends,” “estimates,” “projected,” “expects,” “should,” “guidance,” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, including many of which are outside Dutch Bros’ control that could cause actual results to differ materially from the results discussed in the forward-looking statements, including those related to market conditions, the size of the proposed secondary offering, termination of the proposed secondary offering before closing, the satisfaction of customary closing conditions related to the proposed secondary offering and those described under the heading “Risk Factors” in the registration statement on Form S-3 related to the shares of Common Stock filed with the SEC on September 6, 2023, in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 23, 2024 and in our future reports to be filed with the SEC. Forward-looking statements contained in this press release are made as of this date, and Dutch Bros undertakes no duty to update such information except as required under applicable law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240227718795/en/
For Investor Relations inquiries:
Raphael Gross
ICR
(203) 682-8253
investors@dutchbros.com
For Media Relations inquiries:
Jessica Liddell
ICR
(203) 682-8208
jessica.liddell@icrinc.com
Source: Dutch Bros Inc.
FAQ
How many shares of Common Stock are being offered in the public offering by Dutch Bros?
Who is the sole underwriter for the proposed offering by Dutch Bros?
Is Dutch Bros receiving any proceeds from the sale of shares of Common Stock by the Selling Stockholders?
What type of registration statement has been filed with the SEC relating to Dutch Bros' securities?
How will the proposed offering be made to investors?
Are the shares distributed in kind subject to any restrictions?
What is the par value of Dutch Bros' Class A common stock?
Who are the Selling Stockholders associated with the public offering?
What is the relationship between Dutch Bros and TSG Consumer Partners, L.P. in the public offering?
Will Dutch Bros bear any costs associated with the sale of shares in the offering?
