Box anticipates using substantially all of the proceeds of the KKR-led investment to fund a share repurchase through a “Dutch auction” self-tender of up to $500 million of its common stock, with specific amount and pricing of the self-tender to be determined based on market conditions and stock prices at the time when the self-tender is launched, which is expected to commence after Box releases its fiscal first quarter financial results in May 2021.
“The investment from KKR is a strong vote of confidence in our vision, strategy, and continued efforts to increase growth and profitability. KKR is one of the world’s leading technology investors with a deep understanding of our market and a proven track record of partnering successfully with companies to create value and drive growth. With their support, we will be even better positioned to build on Box’s leadership in cloud content management as we continue to deliver value for our customers around the world,” said Aaron Levie, co-founder and CEO of Box.
Through this investment, Box claims that its vision to deliver content cloud and drive profitable growth is being reaffirmed, and the company stated that it is now focused on advancing its land-and-expand strategy to generate growth from new and existing customers while driving continued demand for its advanced product capabilities and adoption of Box Suites.
“Box has a highly differentiated product platform with a customer-centric vision that makes it an ideal investment for KKR. Under Aaron’s leadership, Box has been transforming and simplifying how people and businesses work, and I look forward to working closely with him, Box’s Board and the broader leadership team to support the company in its next stage of growth,” said John Park, Head of Americas Technology Private Equity at KKR.
As announced, the investment is in the form of convertible preferred stock which will subsequently be convertible into shares of Box common stock at a conversion price of $27.00 per share. Upon closing of this transaction, John Park will join Box’s Board of Directors.