| Item 1.01 | Entry into a Material Definitive Agreement. |
Secondary Offering
On September 19, 2024, Chewy, Inc. (the “Company”) entered into an Underwriting Agreement (the “Underwriting Agreement”) with Buddy Chester Sub LLC (the “Seller”), an entity affiliated with funds advised by BC Partners Advisors LP (“BC Partners”) and Morgan Stanley & Co. LLC (the “Underwriter”), relating to the offer and sale by the Seller of 16,666,667 shares of Class A common stock, par value $0.01 per share, of the Company (the “Class A Common Stock”), at a price to the public of $30.00 per share (the “Offering”). In addition, the Seller granted the Underwriter a 30-day option to purchase up to an additional 2,500,000 shares of Class A Common Stock. The Company did not sell any shares of Class A Common Stock in the Offering and did not receive any proceeds from the sale of the shares offered by the Seller. The Offering closed on September 23, 2024.
The Underwriting Agreement contains customary representations and warranties, agreements and obligations, closing conditions and termination provisions. The Company and the Seller have agreed to indemnify the Underwriters against certain liabilities and to contribute to payments the Underwriters may be required to make in the event of any such liabilities.
The foregoing description of the Underwriting Agreement does not purport to be complete and is subject to and is qualified in its entirety by reference to the Underwriting Agreement, a copy of which is attached hereto as Exhibit 1.1 and the terms of which are incorporated herein by reference.
Kirkland & Ellis LLP has issued an opinion, dated September 23, 2024, regarding certain legal matters with respect to the Offering, a copy of which is filed as Exhibit 5.1 hereto.
Stock Repurchase
On September 18, 2024, the Company entered into an agreement (the “Stock Repurchase Agreement”) with the Seller, to purchase $300 million of shares of Class A Common Stock from the Seller, at a price per share equal to the per share purchase price paid by the underwriter in the Offering specified above (the “Stock Repurchase”). The Stock Repurchase Agreement contains customary representations, warranties and covenants of the parties. The Stock Repurchase closed on September 23, 2024 and in connection therewith the Company repurchased 10,204,081 shares of Class A Common Stock from the Seller. These repurchased shares have been cancelled and retired.
A special committee of the Board of Directors of the Company (the “Board”), consisting solely of independent and disinterested directors not affiliated with BC Partners or the Seller, pursuant to authority delegated to it by the Board, approved the Stock Repurchase. The Board, acting on the recommendation of the special committee, approved the Stock Repurchase without utilizing capacity under the Company’s existing share repurchase program.
The foregoing description of the Stock Repurchase Agreement does not purport to be complete and is subject to and is qualified in its entirety by reference to the Stock Repurchase Agreement, a copy of which is attached hereto as Exhibit 10.1 and the terms of which is incorporated herein by reference. For more information on BC Partners’ relationship to the Company, please refer to the Company’s Definitive Proxy Statement filed on May 24, 2024.
