The Chefs’ Warehouse Announces Offering of $50 Million of Convertible Senior Notes Due 2024

Rhea-AI Summary

The Chefs’ Warehouse has announced a private placement of $50 million in convertible senior notes due 2024, part of an existing series of $150 million in notes issued in 2019. The funds will primarily be used to repay existing loans and support working capital, with potential for future acquisitions. The notes will pay semiannual interest and are convertible into common stock. The offering is subject to market conditions and is not registered under the Securities Act.

Positive

• The company aims to raise $50 million through convertible senior notes, enhancing financial liquidity.
• Approximately $31.2 million of the proceeds will be used to repay a term loan, reducing debt obligations.

Negative

• The offering of convertible notes indicates reliance on debt financing.
• The company retains broad discretion on the use of proceeds, which may introduce uncertainty regarding financial management.

RIDGEFIELD, Conn., Feb. 24, 2021 (GLOBE NEWSWIRE) -- The Chefs’ Warehouse, Inc. (NASDAQ: CHEF) (the “Company”) today announced that it intends to offer, subject to market conditions and other factors, $50 million aggregate principal amount of its convertible senior notes due 2024 (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 Convertible Notes issuance is a reopening of, and will be part of the same series as, the $150 million aggregate principal amount of 1.875% Convertible Senior Notes due 2024 (the “Existing Notes”) issued by the Company on November 22, 2019. While the Convertible Notes will initially trade under a Rule 144A CUSIP number, once de-legended, the Convertible Notes will have the same CUSIP number and will be fully fungible with the Existing Notes.

The Convertible Notes are expected to pay interest semiannually and will be convertible at the option of holders of the Convertible Notes into shares of the Company’s common stock. The Convertible Notes will mature on December 1, 2024, unless earlier converted or repurchased in accordance with their terms. Final pricing terms of the Convertible Notes will be determined by negotiations between the Company and the initial purchaser of the Convertible Notes.

The Company intends to use approximately $31.2 million of the net proceeds from the offering of the Convertible Notes to repay outstanding amounts under its term loan facility and the remainder of the net proceeds for working capital and general corporate purposes, which may include future acquisitions or repaying a portion of the outstanding principal amount under its asset-based loan facility.

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 issuable upon conversion of the Convertible Notes, 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 issuable upon conversion of the Convertible Notes 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, Inc.

The Chefs’ Warehouse, Inc. is a premier distributor of specialty food products in the United States and Canada 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, chocolatiers, cruise lines, casinos and specialty food stores. The Chefs’ Warehouse, Inc. carries and distributes more than 50,000 products to more than 34,000 customer locations throughout the United States and Canada.

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 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 23, 2021 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 Relations
Jim Leddy, CFO, (718) 684-8415

FAQ

What is Chefs’ Warehouse planning with the convertible notes?

Chefs’ Warehouse plans to offer $50 million in convertible senior notes to repay loans and for general corporate purposes.

When will the convertible notes mature?

The convertible notes will mature on December 1, 2024.

What will Chefs’ Warehouse do with the proceeds from the notes offering?

Approximately $31.2 million will be used to repay existing loans, with the remainder for working capital and possible acquisitions.

How much was the previous convertible notes issuance?

The previous issuance included $150 million in convertible senior notes due 2024.

Are the notes registered under the Securities Act?

No, the notes are not registered under the Securities Act, and may not be sold without an applicable exemption.