Dutch Bros Inc. (NYSE: BROS; “Dutch Bros” or the “Company”) has announced the commencement of a registered underwritten public offering of its Class A common stock, with a par value of $0.00001 per share (the “Common Stock”), by certain selling stockholders associated with TSG Consumer Partners, L.P. (the “Selling Stockholders”). The Selling Stockholders plan to offer 8,762,700 shares of Common Stock under a registration statement on Form S-3 filed with the Securities and Exchange Commission (the “SEC”).
Concurrently, upon the completion of this offering, the Selling Stockholders anticipate distributing securities convertible into 723,813 shares of Common Stock to select indirect members who have chosen to maintain their existing interests rather than participating in this offering. These distributed shares will be subject to lock-up restrictions detailed in the prospectus supplement’s “Underwriting” section. The offering is independent of the completion of this distribution.
Dutch Bros is not directly offering any Common Stock shares in this offering and will not receive any proceeds from the sale of Common Stock shares by the Selling Stockholders. However, Dutch Bros will cover the associated sale costs, excluding underwriting discounts and commissions.
Upon the offering’s conclusion, Sean Sullivan, the remaining director nominated by the selling stockholders, is expected to resign from the Dutch Bros board of directors. As per Dutch Bros’ previous stockholders agreement with certain affiliates of its co-founder and the selling stockholders, upon completion of the offering, the selling stockholders will no longer have the right to designate a director to the Dutch Bros board of directors, and the stockholders agreement will terminate.
Furthermore, upon the offering’s completion, the aggregate number of outstanding shares of Dutch Bros’ Class C common stock and Class D common stock will collectively represent less than 5% of all outstanding shares of Dutch Bros’ common stock. Consequently, pursuant to Dutch Bros’ amended and restated certificate of incorporation, the voting rights per share of the remaining outstanding shares of Dutch Bros’ Class C common stock will be reduced to one vote per share on a date determined by the Dutch Bros board of directors, and the remaining outstanding shares of Dutch Bros’ Class D common stock will convert into an equal number of shares of Common Stock upon the offering’s closing.
BofA Securities and Jefferies are jointly acting as book-running managers for the proposed offering. The underwriters may offer the Common Stock shares for sale in one or more transactions on the New York Stock Exchange, in the over-the-counter market, through negotiated transactions, or otherwise at prevailing market prices, related prices, or negotiated prices, with the underwriters retaining the right to reject any order wholly or partially.
A shelf registration statement on Form S-3 concerning Dutch Bros’ securities, including the Common Stock, has been filed with the SEC and became effective upon filing. The proposed offering will occur via a free writing prospectus, a prospectus supplement, and an accompanying prospectus. Investors are advised to read the prospectus supplement, accompanying prospectus, documents incorporated by reference therein, and any other documents Dutch Bros may file with the SEC for comprehensive information. Copies of the prospectus supplement and accompanying prospectus can be obtained from the SEC’s website at www.sec.gov or by contacting BofA Securities or Jefferies LLC.
This press release is not an offer to sell or a solicitation of an offer to buy these securities, nor will there be any offer or sale of these securities in any state or jurisdiction where such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
