AppLovin Announces Pricing of Secondary Public Offering of Common Stock and Concurrent Share Repurchase
AppLovin Corporation (NASDAQ: APP) announced a secondary offering of 19,866,397 shares of its Class A common stock by KKR Denali Holdings L.P. The company will not receive proceeds from the sale. AppLovin plans to repurchase around $570.0 million of the shares being offered. BofA Securities is the lead book-running manager for the offering.
The secondary offering of AppLovin's Class A common stock by KKR Denali Holdings L.P. represents a significant liquidity event for the selling shareholder and is an important capital markets transaction for the company. The fact that AppLovin will not receive any proceeds from the sale indicates that this is a reallocation of existing equity rather than new capital being injected into the company. The repurchase of shares by AppLovin, however, is a bullish signal, often interpreted as the company believing its stock is undervalued. The impact on the stock price can be twofold: the increase in supply of shares might exert downward pressure on the price, while the repurchase could help to mitigate this effect.
Investors should monitor the stock's trading volume and price following the offering to gauge market perception. The involvement of top-tier investment banks as underwriters and managers suggests confidence in the transaction's execution. This offering may also affect the stock's liquidity and could potentially alter the shareholder base, with implications for future voting and ownership structure.
The decision by AppLovin to engage in a Concurrent Share Repurchase concurrent with the secondary offering is a strategic financial move. The repurchase plan, amounting to $570.0 million, is a significant use of the company's capital and will reduce the number of shares outstanding, potentially increasing earnings per share (EPS). This could be seen as a move to enhance shareholder value and manage dilution from the secondary offering.
From a financial perspective, the company's balance sheet strength and cash flow will be key factors in assessing the prudence of this repurchase. Investors should consider the company's current valuation metrics compared to industry peers and how the repurchase might affect these ratios. Additionally, the move should be evaluated within the context of the company's overall capital allocation strategy, including investments in growth initiatives versus shareholder returns.
The offering and Concurrent Share Repurchase are subject to regulatory compliance, as indicated by the involvement of the SEC and the requirement for an effective registration statement. The timing and completion of these transactions are not guaranteed, as they are subject to market conditions and other factors. The legal intricacies of such a transaction require careful navigation to ensure compliance with securities laws and regulations.
Investors should be aware of the legal processes and conditions that could affect the completion of the offering and the repurchase. The role of the co-managers, including veteran and diversity-focused firms, also reflects a growing trend in capital markets toward inclusivity and social responsibility in the selection of underwriting partners. This aspect of the offering may resonate with socially conscious investors and could have reputational implications for AppLovin.
02/29/2024 - 07:47 AM
PALO ALTO, Calif. --(BUSINESS WIRE)--
AppLovin Corporation (NASDAQ: APP) (“AppLovin” or the “Company”), a leading marketing platform, today announced the pricing of an underwritten registered secondary offering of 19,866,397 shares of its Class A common stock by KKR Denali Holdings L.P. (the “Selling Stockholder”). AppLovin will not receive any proceeds from the sale of its Class A common stock by the Selling Stockholder in the offering.
In addition, AppLovin intends to repurchase approximately $570.0 million
BofA Securities is acting as the lead book-running manager for the offering. BTIG, Evercore ISI, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Citigroup, LionTree, Loop Capital Markets, Moelis, Piper Sandler, and The Raine Group are acting as book-running managers for the offering. American Veterans Group, PBC, AmeriVet Securities, Bancroft Capital, Blaylock Van, LLC, C.L. King & Associates, MFR Securities, Inc., Mischler Financial Group, Inc. and Stern are acting as co-managers for the offering.
The offering will be made only by means of an effective registration statement, a prospectus supplement and an accompanying prospectus. AppLovin has filed a registration statement (including a base prospectus) on Form S-3 and a preliminary prospectus supplement with the U.S. Securities and Exchange Commission (the “SEC”), for the offering to which this communication relates. The registration statement automatically became effective on June 1, 2023. Before you invest, you should read the prospectus in that registration statement, the prospectus supplement and other documents AppLovin has filed with the SEC for more complete information about AppLovin and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov . Alternatively, a copy of the prospectus supplement relating to the offering may be obtained by contacting: BofA Securities, NC1-022-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001, Attention: Prospectus Department, or email dg.prospectus_requests@bofa.com .
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, 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 law of any such state or jurisdiction.
About AppLovin
AppLovin makes technologies that help businesses of every size connect to their ideal customers. The company provides end-to-end software and AI solutions for businesses to reach, monetize and grow their global audiences.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements in this release include statements regarding the closing of the repurchase transaction between the underwriters and the Company and the filing of a prospectus supplement. These forward-looking statements are subject to risks and uncertainties, including the risks described in our Annual Report on Form 10-K for the fiscal year ending December 31, 2023. The forward-looking statements in this press release are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law.
Source: AppLovin Corp.
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Source: AppLovin Corp.
How many shares are being offered in the secondary offering by KKR Denali Holdings L.P. for AppLovin Corporation?
AppLovin Corporation is offering 19,866,397 shares of its Class A common stock in the secondary offering.
Who is the lead book-running manager for the offering of AppLovin Corporation's shares?
BofA Securities is the lead book-running manager for the offering of AppLovin Corporation's shares.
Will AppLovin Corporation receive any proceeds from the sale of its Class A common stock in the offering?
AppLovin Corporation will not receive any proceeds from the sale of its Class A common stock in the offering.
What is the amount AppLovin Corporation plans to repurchase of the shares being offered?
AppLovin Corporation plans to repurchase approximately $570.0 million of the shares being offered.
Is the Concurrent Share Repurchase by AppLovin Corporation guaranteed to be completed?
The Concurrent Share Repurchase by AppLovin Corporation is conditioned upon the completion of the offering, so there is no assurance it will be completed.
