SCHEDULE: Bark Inc. Receives $0.90/Share Take-Private Offer

A group of existing investors, including CEO Matt Meeker, has proposed to acquire all outstanding shares of Bark, Inc. not currently owned by them for $0.90 per share in cash.

Summary

• Great Dane Ventures, LLC, a group of existing investors including Bark, Inc.'s CEO Matt Meeker, has submitted a non-binding proposal to acquire all outstanding shares of Bark, Inc. not currently owned by the Reporting Persons.
• The proposed acquisition price is $0.90 per share in cash, which represents a 50.0% premium to Bark's latest share price of $0.60 and a 38.5% premium to its 30-day VWAP of $0.65.
• The proposal values Bark, Inc. at a total enterprise value of approximately $134.4 million and implies a 25x multiple of Bark's FY2025 Adjusted EBITDA of $5.36 million.
• The Reporting Persons, through Great Dane Ventures, LLC, currently own approximately 32.16% of Bark, Inc.'s common stock, or approximately 34.8% if warrants owned by them are exercised.
• The acquisition would be funded with a combination of debt and equity, and the transaction would not be subject to a financing condition, with the group expressing high confidence in securing commitments.
• The group expects to complete confirmatory legal and limited investor diligence and aims to sign a definitive transaction agreement within six weeks, assuming adequate access to management and information.

Sentiment

Score: 7

Explanation: The filing presents a clear, all-cash take-private offer at a significant premium to recent trading prices, indicating a positive immediate liquidity event for shareholders. The confidence in financing and expedited timeline are also positive. However, the non-binding nature and the context of previous share price battering and warrant delisting temper the overall sentiment, suggesting underlying challenges that led to the proposal.

Positives

• The proposal offers a significant premium of 50.0% to Bark's latest share price ($0.60) and 38.5% to its 30-day VWAP ($0.65), providing immediate liquidity to shareholders.
• The transaction is proposed as an all-cash acquisition, offering certainty of value to selling shareholders.
• The acquiring group, Great Dane Ventures, LLC, is composed of existing and long-term investors, including the CEO, who possess significant knowledge of Bark's business and operations, potentially facilitating an expedited process.
• The proposal states that the transaction would not be subject to a financing condition, indicating confidence in securing the necessary funds.
• The acquiring group expresses admiration for the current management team and believes key members would remain instrumental, suggesting continuity for the business.

Negatives

• The proposal is preliminary and non-binding, meaning there are no assurances that a definitive agreement will be reached or that the transaction will be consummated.
• The proposal highlights that Bark's investments have weighed on growth and cash flows, leading to volatility and significant reductions in share price, and an upcoming NYSE delisting of warrants, indicating underlying business challenges.
• If consummated, the transaction would result in Bark's common stock being delisted from the New York Stock Exchange and its SEC registration terminated, removing public trading opportunities for shareholders.
• The implied 25x multiple of FY2025 Adjusted EBITDA of $5.36 million could be considered high by some, depending on growth prospects and industry comparables.

Risks

• No assurances can be given regarding the terms and details of the Acquisition Transaction, or that any further proposal will be accepted by Bark's board of directors and/or shareholders.
• The terms of the Acquisition Transaction may differ materially from the terms contemplated by the Proposal Letter.
• There is no guarantee that Great Dane will be able to obtain the funds necessary to consummate the Acquisition Transaction, despite their stated confidence.
• The Acquisition Transaction, if entered into and consummated, would result in the delisting of Bark's securities from the NYSE and termination of its SEC registration.
• Great Dane or any Reporting Person may at any time amend, pursue, or choose not to pursue the Acquisition Transaction, or change its terms, conditions, or scope.

Future Outlook

The Reporting Persons intend to regularly review their investment in Bark, Inc. and may, at any time, amend, pursue, or choose not to pursue the proposed Acquisition Transaction. They may also change the terms, conditions, or scope of the transaction. Furthermore, they may explore other strategic alternatives, including sales or acquisitions of shares, assets, or businesses by Bark, engaging with third parties for other strategic transactions (potentially leading to delisting), or other business combination transactions such as a merger or reorganization.

Management Comments

• "We (Matt Meeker, RRE Ventures, Resolute Ventures, Founders Circle Capital and Ironbound Partners Fund, the owners of Great Dane Ventures, LLC (Great Dane)) are writing to express our interest in pursuing a transaction to acquire Bark, Inc. (Bark or the Company) that we believe can deliver significant and immediate value to all your shareholders."
• "As existing and long-term investors and partners of Bark, we have a tremendous amount of respect for the work that the Board and the management team of Bark have done to navigate the challenging environment over the past few years."
• "Bark's investments, however, have weighed on growth and cash flows, which has resulted in volatility and significant reductions in the share price and the upcoming NYSE delisting of the Company's warrants."
• "We have seen a consistent pattern of delivering improved results only to have our share price battered further."
• "We believe that our proposed take-private transaction of Bark will provide compelling and immediate liquidity to shareholders."
• "Given our significant history and experience with Bark's business and operations, we are best positioned to complete negotiations and execute definitive documentation in an expeditious manner."
• "We have the utmost confidence in our ability to provide financing commitments that deliver maximum certainty in conjunction with our signing of definitive documentation and as such our transaction would not be subject to a financing condition."
• "We greatly admire the Bark management team and the work that has been done to build Bark, and we believe that key members of the team would remain instrumental to the continued success of the business within the Bark organization."

Industry Context

This take-private proposal for Bark, Inc. reflects a broader trend where public companies, particularly those facing market volatility or perceived undervaluation, become targets for acquisition by private investor groups, often including existing management or significant shareholders. The stated reasons, such as investments weighing on growth and cash flows, and consistent share price battering despite improved results, suggest that the public market may not be adequately valuing Bark's long-term potential. The pet products industry, while generally robust, can still see companies struggle with public market expectations, making private ownership an attractive option for strategic repositioning or long-term value creation away from quarterly pressures.

Related Party Transactions

• Matt Meeker, the Chief Executive Officer and Executive Chairman of Bark, Inc.'s board of directors, is a key member and authorized signatory of Great Dane Ventures, LLC, the entity proposing the acquisition.
• The proposal is made by a group of existing and long-term investors, including Matt Meeker, who collectively own approximately 32.16% of Bark, Inc.'s outstanding shares.

Stakeholder Impact

• Shareholders: Would receive immediate liquidity at a significant premium ($0.90 per share in cash) for shares not owned by the acquiring group. However, if the transaction is consummated, Bark's common stock would be delisted from the NYSE, and its SEC registration terminated, removing public trading opportunities.
• Employees/Management: The acquiring group "greatly admires" the current management team and believes key members would remain instrumental, suggesting continuity for core personnel.
• Creditors: The proposal includes the assumption of existing debt balances, indicating no immediate adverse impact on creditors.

Next Steps

• Great Dane Ventures, LLC expects to enter into a Non-Disclosure Agreement (NDA) with Bark, Inc. to facilitate discussions with CEO Matt Meeker.
• The acquiring group will undertake confirmatory legal diligence and limited confirmatory diligence for its investors.
• Great Dane Ventures, LLC is prepared to provide draft transaction documents within a week and negotiate them expeditiously, aiming to sign a definitive agreement within six weeks.
• Great Dane Ventures, LLC intends to engage in communications, discussions, and negotiations with Bark's management, board of directors, and their advisors, as well as potential partners, securityholders, and other relevant parties.
• The Reporting Persons may retain consultants and advisors and enter into discussions with potential sources of capital and other third parties.
• The Reporting Persons will regularly review their investment and may, at any time, amend, pursue, or choose not to pursue the Acquisition Transaction, or change its terms.

Key Dates

Recommendation

The proposed take-private offer of $0.90 per share represents a substantial premium (50% to the last closing price and 38.5% to the 30-day VWAP). While the offer is non-binding and subject to due diligence and definitive agreements, the involvement of existing major shareholders, including the CEO, and the stated confidence in financing without a condition, suggest a credible path forward. Given the significant premium, current shareholders should hold their shares to await further developments, as the offer price is considerably above recent trading levels. However, the non-binding nature and the possibility of the deal not closing or terms changing prevent a 'buy' recommendation, as there's no guarantee of the offer materializing or being improved.

Keywords

Bark Inc., BARK, take-private, acquisition proposal, Schedule 13D, Matt Meeker, Great Dane Ventures, RRE Ventures, Resolute Ventures, Founders Circle Capital, Ironbound Partners Fund, pet products, common stock, delisting, private equity