On March 11, 2019, MercadoLibre, Inc. (the Companyor we) entered into a Securities Purchase Agreement (the Common Stock Purchase Agreement) with PayPal, Inc. (PayPal) whereby, subject to certain closing conditions, PayPal agreed to purchase in a private placement 1,719,790 shares of common stock, par value $0.001 per share, of the Company (the Common Stock) for approximately $750 million in the aggregate (the Common Stock Private Placement). The price per share in the Common Stock Private Placement will be equal to $436.10.

Also on March 11, 2019, we entered into a Securities Purchase Agreement (the Preferred Stock Purchase Agreement) with Merlin DF Holdings, LP, an affiliate of Dragoneer Investment Group, LLC (Dragoneer), whereby, subject to certain closing conditions, Dragoneer has agreed to purchase in a private placement 100,000 shares of perpetual convertible preferred stock designated as Series A Preferred Stock, par value $0.001 per share, of the Company (the Preferred Stock) for $100 million in the aggregate (the Preferred Stock Private Placement, and, together with the Common Stock Private Placement, the Private Placements), the rights, preferences and privileges of which are set forth in a Certificate of Designation to be filed with the Secretary of State of the State of Delaware, a form of which is attached as Exhibit A to the Preferred Stock Purchase Agreement (the Certificate of Designation). The closing of each of the Private Placements is conditioned on the closing of the Companys previously announced public offering of Common Stock to the Registration Statement on Form S-3 (File No. 333-230196) (the Registration Statement), prospectus supplement, dated March 12, 2019 and accompanying prospectus, dated March 11, 2019 included in the Registration Statement which became effective upon filing with the Securities and Exchange Commission on March 11, 2019 (the Public Offering). The Public Offering is expected to close on March 15, 2019.

Each of PayPal and Dragoneer has agreed to restrictions on its ability to dispose of shares of our Common Stock, Preferred Stock, as applicable, beginning on March 11, 2019 and ending (1) in the case of PayPal, 180 days after the date of the sale of Common Stock to PayPal to the Common Stock Purchase Agreement (the PayPal Closing Date) and (2) in the case of Dragoneer, 365 days after the date of the sale of Preferred Stock to Dragoneer to the Preferred Stock Purchase Agreement (the Preferred Stock Closing Date). The PayPal Closing Date is expected to be March 15, 2019. The Preferred Stock Closing Date is expected to be on or prior to March 29, 2019. The Company and PayPal also agreed to use their respective reasonable best efforts to cooperate with one another to enter into a commercial agreement, within 90 days of the PayPal Closing Date, that establishes complementary initiatives to strengthen the respective companies’ networks.

Each share of Preferred Stock will have a stated value of $1,000, will be entitled to a cash dividend of 4% per annum, and will be convertible into shares of our Common Stock at an initial conversion price of $479.71 (subject to adjustment to the Certificate of Designation). The Company may require the conversion of any or all of the Preferred Stock beginning on the fourth anniversary of the Preferred Stock Closing Date if certain conditions set forth in the Certificate of Designation are met. The Company may redeem any or all of the Preferred Stock for cash, shares of our Common Stock or a combination thereof (at its election, subject to certain conditions) at any time after the seventh anniversary of the Preferred Stock Closing Date for a percentage of the stated value of each share of Preferred Stock, plus any accrued and unpaid dividends at such time, as set forth in the Certificate of Designation. On specified dates after the seventh anniversary of the Preferred Stock Closing Date as set forth in the Certificate of Designation, the holders of the Preferred Stock shall have the right to redeem all of the outstanding shares of Preferred Stock for cash, shares of our Common Stock or a combination thereof (at the Companys election, subject to certain conditions) to be determined by the formula set forth in the Certificate of Designation. Upon the occurrence of a Change of Control (as defined in the Certificate of Designation), the holders will have the right to redeem their shares of Preferred Stock for cash at a price set forth in the Certificate of Designation. The holders of the Preferred Stock shall have the right to vote on matters submitted to a vote of the holders of Common Stock on an as-converted basis unless required by applicable law.

On March 12, 2019, we entered into an underwriting agreement (the Underwriting Agreement) with Goldman Sachs Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley Co. LLC (the Underwriters) relating to the Public Offering. to the Underwriting Agreement, the Company agreed to sell to the Underwriters, and the Underwriters agreed to purchase from the Company, subject to and upon the terms and conditions set forth therein, an aggregate of 2,083,334 shares of Common Stock. In addition, the Underwriters have a 30-day option to purchase up to 312,500 additional shares of Common Stock from the Company.

The Underwriting Agreement contains customary representations, warranties and covenants and includes the terms and conditions for the sale of the shares by the Company to the Underwriters, indemnification and contribution obligations and other terms and conditions customary in agreements of this type.

The foregoing descriptions of certain terms of the Underwriting Agreement, the Common Stock Purchase Agreement and the Preferred Stock Purchase Agreement (to which the form of Certificate of Designation is attached as Exhibit A) are not complete and are qualified in their entirety by reference to the full text of such documents, which are included as Exhibits 1.1, 10.1 and 10.2 hereto, respectively, and incorporated herein by reference.

The information regarding the Private Placements set forth in Item 1.01 of this Current Report is incorporated by reference into this Item 3.02. Each of the Private Placements will be undertaken in reliance upon an exemption from the registration requirements of the Securities Act, to Section 4(a)(2) thereof. The Common Stock issued to the Common Stock Purchase Agreement, the Preferred Stock issued to the Preferred Stock Purchase Agreement and the Common Stock issuable upon conversion of the Preferred Stock may not be re-offered or sold in the United States absent an effective registration statement or an exemption from the registration requirements under applicable federal and state securities laws.

The following exhibits are filed herewith.

EXHIBIT INDEX

MERCADOLIBRE INC Exhibit
EX-1.1 2 s002725x7_ex1-1.htm EXHIBIT 1.1 Exhibit 1.1 2,…
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About MercadoLibre, Inc. (NASDAQ:MELI)

MercadoLibre, Inc. (MercadoLibre) hosts an online commerce platform in Latin America, which is focused on enabling e-commerce and its related services. The Company provides a portfolio of services facilitating e-commerce transactions. Its geographic segments are Brazil, Argentina, Mexico, Venezuela and other countries (including Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Panama, Peru, Portugal, Guatemala, Bolivia, Paraguay, Uruguay and the United States of America. It also operates online commerce platforms in the Dominican Republic, Panama, Bolivia, Guatemala, Paraguay and Portugal. It offers its users an eco-system of over six related e-commerce services: the MercadoLibre Marketplace, The MercadoLibre Classifieds Service, the MercadoPago payments solution, the MercadoLibre Advertising program, the MercadoShops online Webstores solution and the Mercado Envios shipping service. It operates a real estate classified platform in the United States.