Dive Brief:
- AdvancePierre Foods, with financial backing from investment firm Oaktree Capital Group LLC, is pursuing an initial public offering and has approached Barclays Plc, Credit Suisse Group AG, and Morgan Stanley to manage it, people familiar with the matter told Bloomberg.
- The company could be valued at up to $2.5 billion in an IPO, according to those sources.
- AdvancePierre had previously looked for a potential buyer for the company but has decided to instead go public as early as the second quarter, according to Bloomberg sources who are familiar with the matter.
Dive Insight:
This is an early IPO rumbling this year for the food and beverage industry; the overall market has been volatile. Not a single company went public in the U.S. last month. But if and when markets stabilize, food and beverage IPOs that have been waiting to seize the right moment could make a move for their stock ticker symbol in the coming months.
Amplify Snack Brands, maker of SkinnyPop, filed paperwork in July for an IPO then valued at $276 million, but its first day of trading in August was lackluster with shares down more than 8% in afternoon trading. That was an outlier of a performance, given that, over the past five years, IPOs for consumer food companies tended to report an average first day gain of 22%, per IPO ETF manager Renaissance Capital. In September, SunOpta revealed more details about its underwritten public offering, which was valued at $100 million on more than 16 million shares.
In line with many other food and beverage companies, from Nestle to Diamond Foods, AdvancePierre invested in R&D improvements through its new Research and Innovation Center in West Chester Township, OH. New products generate about 10% of the company's annual revenue, making this investment a key driver for future sales growth.