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Blue Apron unveils plan to transfer operational infrastructure to FreshRealm
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Published May 16, 2023 09:43AM ET
Updated May 16, 2023 10:00AM ET
© Reuters.
Investing.com -- Blue Apron (NYSE:APRN) shares jumped in early U.S. trading on Tuesday after the online meal kit delivery service announced a plan to offload its operations assets to retail meal service provider FreshRealm as part of a potential $50 million deal.
The proposal would see New York City-based Blue Apron move its "operational infrastructure," including fulfillment centers, equipment, and personnel, to FreshRealm. Under the terms of a non-binding letter of intent, Blue Apron would receive up to $50M for the transfer, as well as "when transition, efficiency and product milestones are met."
Blue Apron noted that the transfer of the unit would allow the broader group to focus on its direct-to-consumer business, adding that it does not expect that the relationship with FreshRealm will impact its existing revenue stream. The two companies already have a current partnership that sees FreshRealm manufacture Blue Apron's "Heat & Eat" line of ready-made meals.
"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,” said Blue Apron President and Chief Executive Officer Linda Findley.
FreshRealm is also expected to receive warrants in an amount equal to 19.9% of Blue Apron's then-outstanding common stock with an exercise price of $0.01 per share on the closing date of the transaction.
The firms said they intend to sign definitive agreements and finalize the deal "on or about" June 9.
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