The popcorn maker with Skokie, Illinois roots today issued its initial public offering, selling 15 million shares at $18, raising about $270 million. That sets total valuation for the company—now based in Austin, Texas, and known as Amplify Snack Brands—at about $1.35 billion.
Shares, listed under the ticker symbol BETR, opened sharply lower on the first day of trading, sinking 9.1 percent to $16.36 in early afternoon trading on the Nasdaq market.
The IPO comes just more than a year after Chicago entrepreneurs Andy Friedman and Pam Netzky sold a majority stake of their fast-growing SkinnyPop to a Boston private-equity firm for $320 million, according to registration documents.
It caps an incredible run for the brand founded by Netzky and Friedman, which delivered its first bag of popcorn for sale to Potash Bros. Markets in Lincoln Square in August 2010. Neither responded to requests for comment.
Positioned as a healthy, low-calorie snacking alternative free of controversial genetically modified organisms, cholesterol, trans fats, dairy, peanuts, gluten and preservatives, Skinny Pop's ready-to-eat popcorn hit the market on the leading edge of a wave of health-focused products increasingly in-demand by consumers seeking snack foods with perceived health benefits and so-called “clean” ingredient lists.
The idea came to Netzky after she founded gourmet caramel corn and cheese corn purveyor Wells Street Popcorn with Friedman a few years earlier. “While growing Wells Street Popcorn, we discovered an untapped market for a healthier, ready-to-eat popcorn,” Ms. Netzky told Crain's in 2011. “Thus SkinnyPop was born.”
Within days after getting the first bags at Potash Bros., the market came back to her with an order in what she called "scary quantities."
The momentum never slowed. Sales have grown at a torrid pace. In 2014, SkinnyPop booked $132.4 million in sales, up 137.6 percent from $55.7 million the prior year, and more than eightfold from $16 million in 2012, according to securities filings. Through the first six months of 2015, sales were $91.6 million, up nearly 50 percent from the same period in 2014.
The company doesn't see those trends slowing anytime soon.
ANOTHER HELPING PLEASE
Since SkinnyPop's July 14, 2014, acquisition by private-equity firm TA Associates, the company moved its headquarters to Austin and reincorporated as Amplify Snack Brands. As part of the deal, it brought on a new CEO, former Oberto Brands head Tom Ennis, and a new management team.
In April, it tacked on tortilla-chip maker Paqui for $12.2 million, and the company says in its prospectus that it may seek further acquisitions in the snacking sector to fill out its product portfolio.
“We believe a variety of favorable consumer trends, including a greater focus on health and wellness, increased consumption of smaller, more frequent meals throughout the day and a strong preference for convenient better for you products, will continue to drive both strong overall snacking growth, as well as the continued outperformance of better-for-you products within the overall market," Amplify Snack Brands says in its prospectus.
The company estimates the size of the overall U.S. popcorn segment, which includes microwave popcorn and ready-to-eat popcorn, at $1.9 billion in 2014, up 8.1 percent from 2013. The $966 million ready-to-eat sub-segment where SkinnyPop resides is the fastest-growing segment within U.S. salty snacks, growing at a compound annual growth rate of 14.6 percent since 2010, the company estimates. SkinnyPop says it grew its share of the ready-to-eat segment to 12.1 percent in 2014.
And its management team thinks it has room to grow. SkinnyPop is now in 47,000 retail locations in the U.S. and Canada, almost double its 25,000-store footprint last summer. Even so, the company says it has less than 20 percent retail penetration in the U.S., citing data from research firm IRI. Further, it has no presence outside North America, an expansion opportunity the company says it intends to pursue.
The company's founders, Friedman and Netzky, continue to be involved with the company as senior advisers with spots on the company's board of directors. Together, they still own about 8.6 percent of the company's stock and are each eligible for a cash payment of up to $10 million based on SkinnyPop's performance in 2015. They're also due to receive another windfall in 2016, when Amplify expects to pay them about $25.3 million, according to the prospectus.
No comments:
Post a Comment