On March 15, 2021, MGM Growth Properties LLC (the “Company”) completed an offering of 21,850,000 Class A shares representing limited liability company interests (the “Class A shares”) in a registered public offering (the “Offering”), including 2,850,000 Class A shares sold pursuant to the exercise in full by the underwriters of their over-allotment option, for net proceeds of approximately $675.7 million after deducting underwriting discounts and commissions and estimated offering expenses.
The Offering was made pursuant to an effective registration statement on Form
S-3
(File No. 333-238453) (the “Registration Statement”) filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), on May 18, 2020, a base prospectus dated May 18, 2020, a preliminary prospectus supplement dated March 10, 2021 filed with the Commission pursuant to Rule 424(b)(5) under the Securities Act, and a prospectus supplement dated March 10, 2021 (the “Prospectus Supplement”) filed with the Commission pursuant to Rule 424(b)(2) under the Securities Act.
On March 4, 2021, the Company received a notice of redemption from certain subsidiaries of MGM Resorts International (“MGM”) covering 37.1 million operating partnership units of MGM Growth Properties Operating Partnership LP, a consolidated subsidiary of the Company, held by such MGM subsidiaries. The Company used the proceeds of the Offering, after deducting underwriting discounts and commissions, to redeem 21.8 million of such operating partnership units (inclusive of the underwriter’s over-allotment option) to partially satisfy its obligations under the redemption notice, with the remaining 15.3 million operating partnership units redeemed using cash on hand on March 12, 2021.
In connection with the Offering, the Company entered into an underwriting agreement (the “Underwriting Agreement”) by and among (i) the Company, (ii) MGM Growth Properties Operating Partnership LP (the “Operating Partnership”) and (iii) BofA Securities, Inc., J.P. Morgan Securities LLC, Barclays Capital Inc. and Scotia Capital (USA) Inc., as representatives of the several underwriters named therein (the “Underwriters”). Pursuant to the terms of the Underwriting Agreement, the Company, its directors, executive officers and certain other existing holders of operating partnership units agreed not to sell or transfer any Class A shares held by them for 30 days after March 10, 2021 without first obtaining the written consent of the Underwriters, subject to certain exceptions as described in the Prospectus Supplement.
The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement, which is filed as Exhibit 1.1 hereto. The Underwriting Agreement is also incorporated by reference into the Company’s Registration Statement.
The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of the Underwriting Agreement and as of the specific date (or dates) set forth therein, and were solely for the benefit of the parties to the Underwriting Agreement and are subject to certain limitations as agreed upon by the contracting parties. In addition, the representations, warranties and covenants contained in the Underwriting Agreement may be subject to standards of materiality applicable to the contracting parties that differ from those
