APRN - Blue Apron announces $50M deal for operations and logistics transfer

2023-05-16 07:56:19 ET

Blue Apron ( NYSE: APRN ) announced a deal to transfer operations and logistics to FreshRealm in order to pursue an “asset-light model” of business.

“The companies have signed a non-binding letter of intent for up to $50M payable to Blue Apron for the transfer of its operational infrastructure, as well as when transition, efficiency and product milestones are met,” the announcement stated. “...The company does not expect changes to its existing revenue streams as a result of this relationship.”

The company expects the deal to streamline operations and clean up its balance sheet with the long term goal of reaching profitability. At the closing of the transaction, which is now slated for June 9, Blue Apron will transfer its operational infrastructure to FreshRealm, which includes “fulfillment centers, equipment, know-how and personnel” in exchange for warrants in an amount equal to 19.9% of the company’s then-outstanding common stock with an exercise price of $.01 per share on the closing date of the transaction.

“As we continue to evolve, we believe there is an opportunity to simplify our direct role in the fulfillment of our product, allowing us to focus on growing our brand, our customer base and revenue in the long-term,” Blue Apron CEO Linda Findley said. “We expect that this will allow us to focus all our efforts on providing even greater innovation and convenience to our customers as we remain at the forefront of culinary trends. We are confident that we can continue to deliver the same product our customers know and love, while increasing efficiency and accelerating our path to profitability.”

Shares of Blue Apron ( APRN ) rose as much as 25% in premarket action on Tuesday.

Seeking Alpha analyst Pacifica Yield recently offered a warning on dilution for Blue Apron shareholders .

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