BNED to Receive $95 Million of New Equity
Capital Through $50 Million Equity Investment and $45 Million Fully
Backstopped Equity Rights Offering Led by Immersion Corporation
Converts Approximately $34 Million of Second
Lien Debt to Equity
Shareholders Approve Seven Directors to Serve
on Board of Directors
Barnes & Noble Education, Inc. (NYSE: BNED) (“BNED” or the
“Company”), a leading solutions provider for the education
industry, today announced that its shareholders have voted to
approve its previously announced equity and refinancing
transactions with Immersion Corporation (NASDAQ: IMMR)
(“Immersion”), and certain of the Company’s existing shareholders
and strategic relationships (collectively, the “Transactions”).
Receiving today’s shareholder approval marks a key step toward
closing the Transactions, which are expected to significantly
strengthen BNED’s long-term financial position, deleverage its
balance sheet, and enable it to continue to strategically invest in
innovation.
Upon close, which is expected in the second week of June
2024:
- BNED will receive gross proceeds of $95 million of new equity
capital through a $50 million new equity investment (the “Private
Investment”) led by Immersion and a $45 million fully backstopped
equity rights offering (the “Rights Offering”); the transactions
are expected to infuse approximately $75 million of net cash
proceeds after transaction costs;
- The Company’s existing second lien lenders, affiliates of
Fanatics, Lids, and VitalSource Technologies (“VitalSource”)
(collectively, the “Second Lien Lenders”), will convert
approximately $34 million of outstanding principal and any accrued
and unpaid interest into BNED Common Stock;
- The Company will refinance its existing asset backed loan
facility, pursuant to an agreement with its first lien holders,
providing the Company with access to a $325 million facility (the
“ABL Facility”) maturing in 2028. The refinanced ABL Facility is
expected to meaningfully enhance BNED’s financial flexibility and
reduce its annual interest expense; and
Changes to Board of Directors
In addition to the approval of the Transactions, shareholders
approved the appointment of five new Directors to the Company’s
Board of Directors, and re-appointment of two existing Directors,
Kathryn Eberle Walker and Denise Warren. The appointments to the
Board of Directors will be effective at the closing of the
Transactions:
- Eric Singer, President, CEO and Chairman of the Board of
Immersion Corporation
- Emily S. Hoffman, Chief Marketing Officer of SmartPak
- Sean Madnani, Chief Executive Officer of Twist Capital
- William Martin, Chief Strategy Officer of Immersion
Corporation
- Elias Nader, Chief Financial Officer of QuickLogic
Corporation
- Kathryn Eberle Walker, Chief Executive Officer, Presence
Learning Inc., Member of BNED Board of Directors since 2022
- Denise Warren, Founder and Chief Executive Officer of Netlyst,
LLC, Member of BNED Board of Directors since 2022
For more information on the newly appointed Board of Directors,
including full biographies, please refer to the Company’s proxy
statement.
Mario Dell’Aera Jr., David Golden, Michael Huseby, Steven
Panagos, Vice Admiral John Ryan, Rory Wallace, and Raphael
Wallander will step down from the Company’s Board of Directors,
effective at the closing of the Transactions.
Advisors
Paul Hastings LLP is serving as legal advisor and Houlihan
Lokey, Inc. and Berkeley Research Group, LLC are serving as
financial advisors to BNED. Pillsbury Winthrop Shaw Pittman LLP is
serving as legal advisor and BTIG LLC is serving as financial
advisor to Immersion Corporation.
About Barnes & Noble Education, Inc.
Barnes & Noble Education, Inc. (NYSE: BNED) is a leading
solutions provider for the education industry, driving
affordability, access and achievement at hundreds of academic
institutions nationwide and ensuring millions of students are
equipped for success in the classroom and beyond. Through its
family of brands, BNED offers campus retail services and academic
solutions, wholesale capabilities and more. BNED is a company
serving all who work to elevate their lives through education,
supporting students, faculty and institutions as they make tomorrow
a better, more inclusive and smarter world. For more information,
visit www.bned.com.
About Immersion Corporation
Immersion, Inc. (NASDAQ: IMMR) is a Nasdaq-listed company in the
Russell 2000 that is primarily engaged in the business of
intellectual property licensing. Immersion is well capitalized with
over $200 million of cash and investments and no debt as of March
31, 2024.
Forward-Looking Statements
This press release contains certain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995 and information relating to us and our business that are
based on the beliefs of our management as well as assumptions made
by and information currently available to our management. When used
in this communication, the words “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “plan,” “will,” “forecasts,”
“projections,” and similar expressions, as they relate to us or our
management, identify forward-looking statements. Moreover, we
operate in a very competitive and rapidly changing environment. New
risks emerge from time to time. It is not possible for our
management to predict all risks, nor can we assess the impact of
all factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements
we may make. In light of these risks, uncertainties and
assumptions, the future events and trends discussed in this press
release may not occur and actual results could differ materially
and adversely from those anticipated or implied in the
forward-looking statements. Such statements reflect our current
views with respect to future events, the outcome of which is
subject to certain risks, including, among others: the completion,
timing, size and use of proceeds of the Transactions; the amount of
our indebtedness and ability to comply with covenants applicable to
current and/or any future debt financing; our ability to satisfy
future capital and liquidity requirements; our ability to continue
as a going concern; our ability to access the credit and capital
markets at the times and in the amounts needed and on acceptable
terms; our ability to maintain adequate liquidity levels to support
ongoing inventory purchases and related vendor payments in a timely
manner; our ability to attract and retain employees; the pace of
equitable and inclusive access adoption in the marketplace is
slower than anticipated and our ability to successfully convert the
majority of our institutions to our BNC First Day® equitable and
inclusive access course material models or successfully compete
with third parties that provide similar equitable and inclusive
access solutions; the United States Department of Education has
recently proposed regulatory changes that, if adopted as proposed,
could impact equitable and inclusive access models across the
higher education industry; the strategic objectives, successful
integration, anticipated synergies, and/or other expected potential
benefits of various strategic and restructuring initiative, may not
be fully realized or may take longer than expected; dependency on
strategic service provider relationships, such as with VitalSource
Technologies, Inc. and the Fanatics Retail Group Fulfillment, LLC
(“Fanatics”) and Fanatics Lids College, Inc. D/B/A "Lids" (“Lids”),
and the potential for adverse operational and financial changes to
these strategic service provider relationships, may adversely
impact our business; non-renewal of managed bookstore, physical
and/or online store contracts and higher-than-anticipated store
closings; decisions by K-12 schools, colleges and universities to
outsource their physical and/or online bookstore operations or
change the operation of their bookstores; general competitive
conditions, including actions our competitors and content providers
may take to grow their businesses; the risk of changes in price or
in formats of course materials by publishers, which could
negatively impact revenues and margin; changes to purchase or
rental terms, payment terms, return policies, the discount or
margin on products or other terms with our suppliers; product
shortages, including decreases in the used textbook inventory
supply associated with the implementation of publishers’ digital
offerings and direct to student textbook consignment rental
programs; work stoppages or increases in labor costs; possible
increases in shipping rates or interruptions in shipping services;
a decline in college enrollment or decreased funding available for
students; decreased consumer demand for our products, low growth or
declining sales; the general economic environment and consumer
spending patterns; trends and challenges to our business and in the
locations in which we have stores; risks associated with operation
or performance of MBS Textbook Exchange, LLC’s point-of-sales
systems that are sold to college bookstore customers; technological
changes, including the adoption of artificial intelligence
technologies for educational content; risks associated with
counterfeit and piracy of digital and print materials; risks
associated with the potential loss of control over personal
information; risks associated with the potential misappropriation
of our intellectual property; disruptions to our information
technology systems, infrastructure, data, supplier systems, and
customer ordering and payment systems due to computer malware,
viruses, hacking and phishing attacks, resulting in harm to our
business and results of operations; disruption of or interference
with third party service providers and our own proprietary
technology; risks associated with the impact that public health
crises, epidemics, and pandemics, such as the COVID-19 pandemic,
have on the overall demand for BNED products and services, our
operations, the operations of our suppliers, service providers, and
campus partners, and the effectiveness of our response to these
risks; lingering impacts that public health crises may have on the
ability of our suppliers to manufacture or source products,
particularly from outside of the United States; changes in
applicable domestic and international laws, rules or regulations,
including, without limitation, U.S. tax reform, changes in tax
rates, laws and regulations, as well as related guidance; changes
in and enactment of applicable laws, rules or regulations or
changes in enforcement practices including, without limitation,
with regard to consumer data privacy rights, which may restrict or
prohibit our use of consumer personal information for texts,
emails, interest based online advertising, or similar marketing and
sales activities; adverse results from litigation, governmental
investigations, tax-related proceedings, or audits; changes in
accounting standards; and the other risks and uncertainties
detailed in the section titled “Risk Factors” in Part I - Item 1A
in our Annual Report on Form 10-K for the fiscal year ended April
29, 2023 and in Part II – Item 1A in our Quarterly Reports on Form
10-Q. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results or outcomes may vary materially from those described
as anticipated, believed, estimated, expected, intended or planned.
Subsequent written and oral forward-looking statements attributable
to us or persons acting on our behalf are expressly qualified in
their entirety by the cautionary statements in this paragraph. We
undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise after the date of this press
release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240605883293/en/
BNED – Media and Investors Hunter Blankenbaker Vice
President – Corporate Communications and Investor Relations (908)
991-2776 hblankenbaker@bned.com
Grafico Azioni Barnes and Noble Education (NYSE:BNED)
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