Beyond Meat picks investment banks for IPO
- Beyond Meat has hired investments banks J.P Morgan, Goldman Sachs and Credit Suisse to help with an initial public offering, according to CNBC.
- An IPO would be the first stock offering for the new generation of companies making meat-like products from plants. CNBC could not determine what valuation Beyond Meat is seeking in its IPO.
- The California company has a number of high-profile investors including Bill Gates, Leonardo DiCaprio and Tyson Foods.
While little is known about what valuation Beyond Meat is seeking or when the IPO will take place, the plant-based meat company's decision to move forward with a public offering comes at a good time. Plant-based foods are quickly growing in popularity among consumers concerned about the heath risks that come with consuming meat or the impact animal agriculture has on the environment.
Sales of plant-based foods jumped 20% in the past year to more than $3.3 billion, according to data from Nielsen and the Plant Based Foods Association. Specifically, plant-based meat alternatives totaled $670 million in sales — up 24% compared to 6% last year.
According to Beyond Meat, the company's products are sold in more than 30,000 locations, including Yankee Stadium, TGI Fridays and Harvard University. Retailers such as Safeway, Whole Foods, Kroger, Target, Publix and Sprouts also carry their products. It competes in the alternative meat space with Impossible Burger, frozen veggie burger such as Kraft Heinz's Boca Burger, and Memphis Meats — the maker of cell-based meats.
An IPO could give Beyond Meat, founded in 2009 by CEO Ethan Brown, more cash to fund its expansion and expand the company's reach into other plant-based meats. It also could potentially give some of its investors like Tyson Foods a chance to cash out of their early investments.
Tyson Foods initially took a 5% stake in Beyond Meat about two years ago, the first time a major meat producer invested in a plant protein-based company. It increased its holdings after participating in another capital financing round late last year. The company's then-CEO told Food Dive in February that Tyson Foods hadn't ruled out acquiring Beyond Meat or Memphis Meats, where it has a minority position.
"Any investment that we're making through the Tyson Ventures we leave that as an option, an outright acquisition is something we could pursue," said Tom Hayes, Tyson's CEO at the time. "It's not something that is off the table, but I would say that's our lead in, our lead in is to invest, a great investment and stay close to it. If it does become something that we feel is best for our shareholders then we can pull the trigger on it."
The Beyond Burger, which sizzles and oozes fats while cooking, has proven to be a hit, selling more than 10 times as fast as its next bestselling item, the company said in 2017. The California company also makes sausages and chicken from plants. For now, it appears there is little to stop companies like Beyond Meat, except for opposition from traditional meat producers and trade groups concerned about their use of the word "meat." Beyond Meat is wise to strike with an IPO while the grill is hot and popularity for its products is sizzling.
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