UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 11, 2017
WAYFAIR INC.
(Exact name of Registrant as specified in its charter)
Delaware | 001-36666 | 36-4791999 | ||
(State or other Jurisdiction of Incorporation or Organization) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
4 Copley Place, 7th Floor
Boston, MA 02116
(Address of principal executive offices, including zip code)
(617) 532-6100
(Registrants telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On September 11, 2017, Wayfair Inc. (the Company ) and its wholly-owned subsidiary Wayfair LLC (the Borrower ) entered into Amendment No. 1 (the Credit Agreement Amendment ) to the Credit Agreement (the Credit Agreement ), dated as of February 22, 2017, by and among the Company, the Borrower, Citibank, N.A., in its capacity as administrative agent, swing line lender and letter of credit issuer, and certain other lenders party thereto.
The Credit Agreement Amendment provides that the letter of credit sublimit under the Credit Agreement is no more than $25 million in the aggregate for all letters of credit issued on behalf of Borrower under the Credit Agreement. In addition, the Credit Agreement Amendment contains clarifying edits to the mandatory prepayment provisions of the Credit Agreement.
The foregoing description of the Credit Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement Amendment filed herewith as Exhibit 10.1 and incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On September 11, 2017, the Company issued a press release announcing the pricing of $375 million aggregate principal amount of 0.375% convertible senior notes due 2022 in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended. A copy of the press release is furnished as Exhibit 99.1 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number |
Description of Exhibit |
|
10.1 | Amendment No. 1 to the Credit Agreement dated February 22, 2017 among Wayfair LLC, Wayfair Inc., each Lender from time to time party thereto and Citibank, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer dated September 11, 2017. | |
99.1 | Press Release dated September 11 , 2017. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
WAYFAIR INC. | ||||||
Date: September 12, 2017 | By: |
/s/ Enrique Colbert |
||||
Name: |
Enrique Colbert |
|||||
Title: |
General Counsel and Secretary |
Exhibit Index
Exhibit 10.1
EXECUTION COPY
AMENDMENT NO. 1
This AMENDMENT NO. 1 (this Amendment No. 1 ) dated as of September 11, 2017, by and among WAYFAIR LLC, a limited liability company organized under the laws of the State of Delaware (the Borrower ); WAYFAIR INC., a corporation organized under the laws of the State of Delaware (the Parent ); CITIBANK, N.A., as Administrative Agent (in such capacity, the Administrative Agent ) Swing Line Lender and L/C Issuer, and the lenders party hereto, is entered into in connection with the Credit Agreement, dated as of February 22, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified prior to the date hereof, the Credit Agreement ), among the Borrower, the Parent, the lenders party thereto, the Swing Line Lender, the L/C Issuer and the Administrative Agent.
The Borrower, the Parent, the Lenders, the Administrative Agent, the Swing Line Lender and the L/C Issuer have agreed to certain amendments to the Credit Agreement.
Now, therefore, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
Section 1 Definitions . Except as otherwise defined in this Amendment No. 1, terms defined in the Credit Agreement are used herein as defined therein.
Section 2 Amendments to Credit Agreement . The following amendments to the Credit Agreement shall take effect on the date hereof:
(a) References Generally . References in the Credit Agreement (including references to the Credit Agreement as amended hereby) to this Agreement (and indirect references such as hereunder, hereby, herein and hereof), and references in the other Loan Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement as amended hereby.
(b) Definitions . Section 1.1 of the Credit Agreement shall be amended by amending the following definitions and replacing them in their entirety with the definitions set forth herein:
Letter of Credit Commitment Amount means, as of any date, $25,000,000, as such amount is reduced from time to time in accordance with Section 2.3 .
Standby Letter of Credit Commitment Amount means, as of any date, $25,000,000, which is a sub-facility of the Letter of Credit Commitment and is a part of, and not in addition to, the Letter of Credit Commitment.
(c) Amendment of Section 2.2(d) . Section 2.2(d) of the Credit Agreement is hereby amended to read in its entirety as follows:
(d) the aggregate principal amount of all Letter of Credit Outstandings (i) associated with commercial Letters of Credit would exceed the Commercial Letter of Credit Commitment Amount or (ii) associated with standby Letters of Credit would exceed the Standby Letter of Credit Commitment Amount.
(d) Amendment of Section 2.3.2 . Section 2.3.2 of the Credit Agreement is hereby amended to read in its entirety as follows:
2.3.2 [Reserved] .
(e) Amendment of Section 3.1.2(b) . Section 3.1.2(b) of the Credit Agreement is hereby amended to read in its entirety as follows:
(b) Mandatory Prepayment from Permitted Convertible Indebtedness . Upon the incurrence or issuance by the Parent of any Indebtedness pursuant to Section 8.2(h) , the Borrower shall, or shall cause the Parent to, promptly prepay the principal amount of the Revolving Loans in an amount equal to 100% of the principal amount of such Indebtedness in the manner set forth in Section 3.1.3 (without a requirement to Cash Collateralize Letters of Credit Outstandings).
Section 3 Conditions of Effectiveness . This Amendment No. 1 shall become effective as of the date upon which the Administrative Agent shall have received counterparts of this Amendment No. 1 executed by the Parent, the Borrower and the Lenders (the Amendment Effective Date ).
Section 4 Reserved .
Section 5 Loan Documents . Except as herein provided, the Loan Documents shall remain unchanged and in full force and effect. This Amendment No. 1 is a Loan Document under the Credit Agreement and shall be construed in accordance with the Credit Agreement.
Section 6 Miscellaneous . This Amendment No. 1 may be executed in any number of counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment No. 1 by facsimile or other electronic imaging means (e.g. pdf or tif) shall be effective as delivery of a manually executed counterpart of this Amendment No. 1. This Amendment No. 1 and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Amendment No. 1 and the transactions contemplated hereby and under any Loan Document shall each be governed by, and each be construed in accordance with, the laws of the State of New York. This Amendment No. 1 and each other Loan Document constitute the entire understanding among the parties hereto with respect to the subject matter hereof and supersede any prior agreements, written or oral, with respect thereto.
-2-
Section 7 Jurisdiction; Etc. Each Loan Party irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Administrative Agent or any other Lender Party or any related party of the foregoing in any way relating to this Amendment No. 1 or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York state court or, to the fullest extent permitted by applicable Law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Nothing in this Amendment No. 1 or in any other Loan Document shall affect any right that the Administrative Agent or any other Lender Party may otherwise have to bring any action or proceeding relating to this Amendment No. 1 or any other Loan Document against each Loan Party or its properties in the courts of any jurisdiction. Each Loan Party irrevocably and unconditionally waives, to the fullest extent permitted by applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Amendment No. 1 or any other Loan Document in any court referred to in this Section 7. Each Loan Party hereby irrevocably waives, to the fullest extent permitted by applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
[Signature Page Follows]
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IN WITNESS WHEREOF , the parties hereto have caused this Amendment No. 1 to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.
BORROWER: | ||
WAYFAIR LLC | ||
By: |
/s/ Michael Fleisher |
|
Name: Michael Fleisher | ||
Title: Chief Financial Officer |
PARENT: | ||
WAYFAIR INC. | ||
By: |
/s/ Michael Fleisher |
|
Name: Michael Fleisher | ||
Title: Chief Financial Officer |
[Signature Page - Amendment No.1]
CITIBANK, N.A. , as Administrative Agent, Swing Line Lender and L/C Issuer |
||
By: |
/s/ Michael Berry |
|
Name: | Michael Berry | |
Title: | Senior Vice President |
[Signature Page - Amendment No.1]
CITIBANK, N.A. , as Lender |
||
By: Name: Title: |
/s/ Michael Berry Michael Berry Senior Vice President |
[Signature Page - Amendment No.1]
SILICON VALLEY BANK, as Lender |
||
By: |
/s/ Kristy Vlahos |
|
Name: | Kristy Vlahos | |
Title: | Director |
[Signature Page - Amendment No.1]
Exhibit 99.1
FOR IMMEDIATE RELEASE
WAYFAIR INC. PRICES OFFERING OF $375 MILLION CONVERTIBLE SENIOR NOTES
BOSTON, Massachusetts (September 11, 2017) - Wayfair Inc. (NYSE: W) (the Company) priced $375 million aggregate principal amount of 0.375% convertible senior notes due 2022 in a private placement under the Securities Act of 1933, as amended (the Securities Act). The offering was upsized from the previously announced offering of $300 million aggregate principal amount of notes. In connection with the offering, the Company has granted the initial purchasers an option to purchase (solely to cover over-allotments) up to an additional $56.25 million aggregate principal amount of notes, which additional notes shall be delivered within a 13-day period beginning on, and including, the date the Company first issues the notes.
The notes will bear interest at a rate of 0.375% per year, payable semi-annually in arrears on March 1 and September 1 of each year, beginning March 1, 2018. The notes will mature on September 1, 2022, unless earlier redeemed, repurchased or converted in accordance with their terms. Prior to June 1, 2022, the notes will be convertible only upon satisfaction of certain conditions and during certain periods. Thereafter, the notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The Company may not redeem the notes prior to September 8, 2020. On or after September 8, 2020, the Company may redeem for cash all or part of the notes if the last reported sale price of the Companys Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading-day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will equal 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
The notes will be convertible at the option of holders, subject to certain conditions and during certain periods, into cash, shares of the Companys Class A common stock or a combination of cash and shares of the Companys Class A common stock, with the form of consideration determined at the Companys election. Holders of the notes will have the right to require the Company to repurchase all or a portion of their notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain events. The conversion rate will initially be 9.6100 shares of the Companys Class A common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $104.06 per share of the Companys Class A common stock). The initial conversion price of the notes represents a premium of approximately 35% to the $77.08 per share closing price of the Companys Class A common stock on September 11, 2017. The sale of the notes is expected to close on September 15, 2017, subject to customary closing conditions.
When issued, the notes will be the Companys senior unsecured obligations and will rank senior in right of payment to any of the Companys unsecured indebtedness that is expressly subordinated in right of payment to the notes; equal in right of payment to any of the Companys unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Companys secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Companys subsidiaries.
In connection with the pricing of the notes, the Company entered into privately negotiated capped call transactions with certain of the initial purchasers or their affiliates and another financial institution (the option counterparties). These capped call transactions are expected generally to reduce the potential dilution with respect to the Companys Class A common stock and/or offset any cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be, upon any conversion of notes in the event that the market price of the Companys Class A common stock is greater than the strike price of the capped call transactions, with such reduction of potential dilution or offset of cash payments subject to a cap.
The Company has been advised that, in connection with establishing their initial hedge positions with respect to the capped call transactions, the option counterparties or their respective affiliates expect to purchase shares of the Companys Class A common stock and/or enter into various derivative transactions with respect to the Companys Class A common stock concurrently with, or shortly after, the pricing of the notes. This activity could have the effect of increasing (or reducing the size of any decrease in) the market price of the Companys Class A common stock or the notes at that time. The option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the Companys Class A common stock and/or purchasing or selling the Companys Class A common stock or other securities of the Company in secondary market transactions from time to time prior to maturity of the notes (and are likely to do so during any observation period related to any conversion of the notes). This activity could also cause or avoid an increase or a decrease in the market price of the Companys Class A common stock or the notes, which could affect the ability of holders to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of the notes, it could affect the number of shares of the Companys Class A common stock and value of the consideration that holders will receive upon conversion of the notes.
In addition, if any such capped call transaction fails to become effective, whether or not this offering of notes is completed, the option counterparty party thereto may unwind its hedge positions with respect to the Companys Class A common stock, which could adversely affect the value of the Companys Class A common stock and, if the notes have been issued, the value of the notes.
The Company estimates that the net proceeds from this offering will be approximately $365.5 million (or $420.3 million if the initial purchasers exercise their over-allotment option in full), after deducting fees and estimated offering expenses payable by the Company. The Company intends to use $38.4 million of the net proceeds from this offering to pay the cost of the capped call transactions. The Company intends to use the remaining net proceeds from this offering for working capital and general corporate purposes. If the initial purchasers exercise their over-allotment option, the Company expects to use a portion of the net proceeds from the sale of the additional notes to enter into additional capped call transactions with the option counterparties and for working capital and general corporate purposes.
The notes and the Class A common stock issuable upon conversion of the notes, if any, are not being registered under the Securities Act, or the securities laws of any other jurisdiction. The notes and the Class A common stock issuable upon conversion of the notes, if any, may not be offered or sold in the United States except in transactions exempt from, or not subject to, the registration requirements of the Securities Act and any applicable state securities laws.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, 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 such jurisdiction.
About Wayfair Inc.
Wayfair Inc. offers an extensive selection of home furnishings and décor across all styles and price points. The Wayfair family of sites includes:
| Wayfair, an online destination for all things home |
| Joss & Main, where beautiful furniture and finds meet irresistible savings |
| AllModern, unbelievable prices on everything modern |
| DwellStudio, unexpected modern design for everyday life |
| Birch Lane, a collection of classic furnishings and timeless home décor |
Wayfair generated $3.9 billion in net revenue for the twelve months ended June 30, 2017. Headquartered in Boston, Massachusetts with operations throughout North America and Europe, the Company employs more than 6,000 people.
Forward-Looking Statements
This press release contains forward-looking statements. All statements other than statements of historical fact contained in this press release, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms 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. Forward looking statements relating to the proposed offering of the notes include, but are not limited to: whether the Company will consummate the offering on the proposed terms, or at all; the anticipated use of the net proceeds of the offering; and whether the capped call transactions will become effective.
Forward-looking statements are based on current expectations of future events. We cannot guarantee that any forward-looking statement will be accurate, although we believe that we have been reasonable in our expectations and assumptions. Investors should realize that if underlying assumptions prove inaccurate or that known or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections. Investors are therefore cautioned not to place undue reliance on any forward-looking statements. These forward-looking statements speak only as of the date of this press release and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.
Factors that could cause or contribute to differences in our future results include, but are not limited to: economic factors, such as interest rates, currency exchange fluctuations and changes in customer spending; the rate of growth of the Internet and e-commerce; our ability to acquire new customers and sustain and/or manage our growth; our ability to increase our net revenue per active customer; our ability to build and maintain strong brands; our international growth and expansion; and our ability to compete successfully. A further list and description of these risks, uncertainties and other factors can be found under Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and the Companys subsequent filings with the Securities and Exchange Commission. We qualify all of our forward-looking statements by these cautionary statements.
Investor Relations Contact:
Julia Donnelly
Wayfair Inc.
E-mail: IR@wayfair.com