The Container Store Group, Inc. Announces Secondary Offering of Common Stock by Selling Stockholders

Rhea-AI Summary

The Container Store Group, Inc. (TCS) announced a secondary offering of 5,000,000 shares of common stock, representing about 9.9% of its outstanding shares, by funds affiliated with Leonard Green & Partners. TCS will not receive any proceeds from this offering. BofA Securities will act as the sole underwriter and facilitate sales through various methods at market prices. The offering is supported by a shelf registration statement declared effective by the SEC, although it will not constitute an offer to sell securities in jurisdictions where it would be unlawful.

Positive

• None.

Negative

• Shareholder dilution due to secondary offering of 5,000,000 shares.
• No proceeds will be received by TCS from the sale, potentially limiting growth opportunities.

The Container Store Group, Inc. (NYSE: TCS) (“The Container Store” or “TCS”) today announced a secondary offering of 5,000,000 shares of its common stock (representing approximately 9.9% of its issued and outstanding shares) by funds affiliated with Leonard Green & Partners, L.P. (the “Selling Stockholders”). The offering consists entirely of shares of common stock to be sold by the Selling Stockholders. TCS will not receive any proceeds from the sale of the shares of common stock by the Selling Stockholders.

BofA Securities is acting as the sole underwriter for the offering. BofA Securities proposes to offer the shares of our common stock from time to time for sale in one or more transactions on the NYSE, in the over-the-counter market, through negotiated transactions or otherwise at market prices prevailing at the time of sale, at prices related to such prevailing market prices or negotiated prices, subject to their right to reject any order in whole or in part.

A shelf registration statement on Form S-3 (including a prospectus) relating to the securities being sold in the offering has been declared effective by the Securities and Exchange Commission. The offering will be made only by means of a prospectus supplement and an accompanying prospectus. You may get these documents, including the preliminary prospectus supplement, for free by visiting EDGAR on the SEC website at www.sec.gov. Copies of the prospectus supplement, when available, and the accompanying prospectus relating to this offering may be obtained by contacting: BofA Securities; NC1-004-03-43; 200 North College Street, 3rd floor; Charlotte NC 28255-0001; Attn: Prospectus Department; Email: dg.prospectus_requests@bofa.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About The Container Store

The Container Store Group, Inc. is the nation’s leading retailer of storage and organization products and solutions – a concept they originated in 1978. Today, with locations nationwide, the retailer offers more than 11,000 products designed to help customers accomplish projects, maximize their space and make the most of their home. The Container Store also offers a full suite of custom closets designed to accommodate all sizes, styles and budgets.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding the proposed offering of shares of our common stock by the Selling Stockholders. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions.

These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the outbreak of COVID-19 and the associated impact on our business, results of operations and financial condition; our ability to continue to lease space on favorable terms; costs and risks relating to new store openings; quarterly and seasonal fluctuations in our operating results; cost increases that are beyond our control; our inability to protect our brand; our failure or inability to protect our intellectual property rights; overall decline in the health of the economy, consumer spending, and the housing market; our inability to source and market new products to meet consumer preferences; failure to successfully anticipate consumer preferences and demand; competition from other stores and internet-based competition; vendors may sell similar or identical products to our competitors; our and our vendors’ vulnerability to natural disasters and other unexpected events; disruptions at our Elfa manufacturing facilities; deterioration or change in vendor relationships or events that adversely affect our vendors or their ability to obtain financing for their operations, including COVID-19; product recalls and/or product liability, as well as changes in product safety and other consumer protection laws; risks relating to operating two distribution centers; our dependence on foreign imports for our merchandise; our reliance upon independent third party transportation providers; our inability to effectively manage our online sales; effects of a security breach or cyber-attack of our website or information technology systems, including relating to our use of third-party web service providers; damage to, or interruptions in, our information systems as a result of external factors, working from home arrangements, staffing shortages and difficulties in updating our existing software or developing or implementing new software; our indebtedness may restrict our current and future operations, and we may not be able to refinance our debt on favorable terms, or at all; fluctuations in currency exchange rates; our inability to maintain sufficient levels of cash flow to meet growth expectations; our fixed lease obligations; disruptions in the global financial markets leading to difficulty in borrowing sufficient amounts of capital to finance the carrying costs of inventory to pay for capital expenditures and operating costs; changes to global markets and inability to predict future interest expenses; our reliance on key executive management; employee furloughs and uncertainty about their ability to return to work; our inability to find, train and retain key personnel; labor relations difficulties; increases in health care costs and labor costs; violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery and anti-kickback laws; impairment charges and effects of changes in estimates or projections used to assess the fair value of our assets; effects of tax reform and other tax fluctuations; and significant fluctuations in the price of our common stock; substantial future sales of our common stock, or the perception that such sales may occur, which could depress the price of our common stock; risks related to being a public company; our performance meeting guidance provided to the public; anti-takeover provisions in our governing documents, which could delay or prevent a change in control; and our failure to establish and maintain effective internal controls.

These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, (the “SEC”) on June 17, 2020, and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

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FAQ

What is the purpose of the secondary offering by TCS?

The secondary offering of 5,000,000 shares is conducted by selling stockholders affiliated with Leonard Green & Partners and does not benefit TCS directly.

When will the secondary offering for TCS shares take place?

The offering will occur through BofA Securities at market prices, and specific timing will depend on market conditions.

How much of TCS's outstanding shares does the offering represent?

The secondary offering represents approximately 9.9% of TCS's issued and outstanding shares.

Who is managing the secondary offering for The Container Store?

BofA Securities is the sole underwriter managing the secondary offering for The Container Store.

What are the risks associated with TCS's secondary offering?

The offering may dilute existing shareholders' equity and does not provide TCS with new funds for growth.