Item 1.01. Entry into a Material Definitive Agreement.
On February 17, 2021, Chegg, Inc. (“Chegg” or the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC and Allen & Company LLC as representatives of the several underwriters named in Schedule II thereto (the “Underwriters”) and a stockholder of the Company named on Schedule I thereto (the “Selling Stockholder”), pursuant to which Chegg agreed to issue and sell 9,804,000 shares of its common stock, par value $0.001 per share (the “Common Stock”), at a public offering price of $102.00 per share (the “Offering”). Dan Rosensweig, Chegg’s President, Chief Executive Officer and Co-Chairperson of the Board, is the Selling Stockholder. Under the terms of the Underwriting Agreement, Chegg and the Selling Stockholder granted the Underwriters a 30-day option to purchase up to an additional 1,170,600 shares of Common Stock from Chegg and 300,000 shares of Common Stock from the Selling Stockholder. The Underwriting Agreement contains customary representations and warranties, conditions to closing, market standoff provisions, termination provisions and indemnification obligations, including for liabilities under the Securities Act of 1933, as amended. The Offering will be made pursuant to Chegg’s Registration Statement on Form S-3 (File No. 333-253150) that was filed with the Securities and Exchange Commission (“SEC”) and became immediately effective on February 16, 2021, the preliminary prospectus relating to the Offering included therein and a final prospectus relating to the Offering dated February 17, 2021.
On February 18, 2021, the Underwriters elected to exercise their option to purchase an additional 1,470,600 shares of Common Stock (the “Additional Shares”).
Chegg estimates that net proceeds from the Offering will be approximately $1,091.6 million including the sale of the Additional Shares, after deducting underwriting discounts and commissions and estimated Offering expenses payable by Chegg. Chegg intends to use the net proceeds from the Offering for general corporate purposes, which may include acquisitions or other strategic transactions and the repayment of indebtedness. Chegg will not receive any proceeds from the sale of Common Stock by the Selling Stockholder.
A copy of the Underwriting Agreement is filed as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated by reference herein. The foregoing description of the Underwriting Agreement is qualified in its entirety by reference to such exhibit.
A copy of the opinion of Fenwick & West LLP, relating to the validity of certain of the shares in connection with the Offering, is filed with this Current Report on Form 8-K as Exhibit 5.1.