After first submitting for its IPO confidentially in February, plant-based meals company Oatly Group AB is about to go public Thursday.
On Wednesday, Oatly
priced its initial public offering at $17 a share, at the excessive finish of its anticipated vary, providing 84.4 million American Depository Shares. Selling stockholders will provide 19.7 million of these shares.
The pricing valued the company at about $10 billion, and can increase about $1.43 billion. The company will commerce on the Nasdaq underneath the ticker “OTLY.”
Oatly Group modified its title from Havre Global AB on March 1.
There are 9 lead underwriters for the submitting: Morgan Stanley, JPMorgan, Credit Suisse, Barclays, Jeffries, BNP Paribas, BofA Securities, Piper Sandler and RBC Capital Markets.
Oatly is backed by private-equity group Blackstone Group, in addition to movie star names like Oprah Winfrey and Jay Z who invested $200 million in the company final summer time. That funding valued the company at $2 billion at the time, in accordance to (*5*)
Based in Malmö, Sweden, Oatly has been in the oat milk enterprise for 25 years. The company’s product lineup now additionally contains frozen desserts and “oatgurt,” an alternate yogurt.
Toni Petersson has been Oatly’s chief government since 2012, and can be part of the board as soon as the company is publicly-traded.
Christian Hanke, a former Nasdaq Stockholm government, has served as Oatly’s chief monetary officer since March 2020.
The company goes public at a time when local weather change and sustainability points are high of thoughts for a lot of customers, significantly youthful ones.
“Generation Z and Millennials will become the dominant global generations in the coming years, bringing to the market a new set of values and expectations,” the company mentioned in its prospectus.
“These combined factors are driving a clear rapid, accelerating growth and influx of new consumers to the plant-based dairy market.”
According to the Plant Based Foods Association and Good Foods Institute, plant-based-food gross sales reached $7 billion in 2020.
Consumer Insights information quoted in the prospectus says the plant-based milk class will develop 20% to 25% over the subsequent three years.
Oatly is concentrated on its position in serving to to remodel the meals trade so as to be higher for the surroundings and meet the well being wants of its prospects. The company factors out that substituting a cup of Oatly for a cup of cow’s milk reduces greenhouse gasoline emissions, land use and power consumption.
Tastewise, which supplies meals and beverage information and intelligence, mentioned in a December 2020 report that “plant-based everything” can be certainly one of the high 10 U.S. developments for this 12 months.
“The number one reason consumers turn to plant-based food and beverage? Health,” the report mentioned.
“Plant-based is no longer just an ‘alternative’ to meat, but rather a significant
category in itself.”
Oatly’s key markets are Sweden, Germany and the U.Okay., although its merchandise have been out there in 60,000 retail shops and 32,200 espresso retailers round the world as of December 31, 2020. Among the locations the place prospects can discover Oatly is Starbucks
the place demand was so excessive there was a scarcity quickly after the espresso chain launched drinks made with the merchandise.
COVID-19 has impacted Oatly’s enterprise as lockdowns round the world restricted entry to eating places, bars and different eating institutions.
In 2020, Oatly had income of $421.4 million, up from $204.0 million the 12 months before. However, the company reported a lack of $60.4 million “reflecting our continued investment in production, brand awareness, new markets and product development,” the prospectus mentioned.
Oatly is classed as an “emerging growth company,” which implies it doesn’t have to make the similar disclosures required of larger public firms. A enterprise stays an rising development company till it reaches a lot of milestones, together with annual income of greater than $1.07 billion.
Oatly warns that it has reported losses over the final “several” years and expects working and capital bills to rise “substantially.”
“Our expansion efforts may take longer or prove more expensive than we anticipate, particularly in light of the COVID-19 pandemic, and we may not succeed in increasing our revenue and margins sufficiently to offset the anticipated higher expenses,” the company mentioned in its prospectus.
“We incur significant expenses in researching and developing our innovative products, building out our production and manufacturing facilities, obtaining and storing ingredients and other products and marketing the products we offer.”
Here are 5 extra things to know about Oatly forward of its public debut:
Oatly is not going to pay a dividend for the “foreseeable future.” The company plans to use the proceeds from the providing as working capital, for incremental development, together with growth, and different normal functions.
Coffee supplied a gateway for Oatly in the U.S. Oatly arrived in the U.S. in 2017. The company says it “focused on targeting coffee’s tastemakers, professional baristas at independent coffee shops” as a method to enter the market.”
By December 31, 2020, Oatly was in additional than 7,500 retail retailers and 10,000 espresso retailers in the U.S. Revenue in 2020 totaled $100 million in the U.S.
Oatly can be present in 11,000 espresso and tea retailers in China, and at greater than 6,000 retail and specialty retailers throughout the nation, together with 1000’s of Starbucks places.
Limited oat provide might have a monetary impression. Oatly is determined by 5 suppliers for the oats it makes use of, buying this ingredient by millers in Sweden, Denmark, the U.S. and Belgium.
“We have in the past experienced interruptions in the supply of oats from one supplier that resulted in delays in delivery to us,” the company mentioned, noting that its oat provide can also be weak to pure disasters similar to drought or floods.
“We could experience similar delays in the future from any of these suppliers.”
The company additionally is determined by choose suppliers for enzymes, together with one provider that gives an enzyme for a few of Oatly’s merchandise, together with Barista Edition oat milk.
The major elements of the company’s merchandise are manufactured in 4 major services as of March 2021, which is also an issue if one thing important occurs at anybody facility.
The dairy market is very aggressive. Oatly identifies typical dairy firms, together with Dean Foods Inc.
and Lactalis as opponents, in addition to the rising array of plant-based dairy different firms which are coming into the market, together with soy, almond, hemp and cashew milk manufacturers.
All of those firms are competing for a finite variety of retail shops, espresso retailers, foodservice shoppers and customers.
“In order for us to not only maintain our market position, but also to continue to grow and acquire more consumers, some of which may be switching from traditional dairy to plant-based alternatives, we must continue to provide delicious, high-quality products, and consumers must believe in our vision for a food system that is better for people and the planet,” the company mentioned.
Oatly’s advertising and marketing and COVID-19 could be a hurdle to development. Oatly says that its historical past of “provocative and unconventional marketing and advertising campaigns” has gotten them into scorching water, together with a 2014 lawsuit filed by the Swedish dairy foyer by which the courts discovered Oatly was “disparaging to dairy products.”
“The decision resulted in a ban on our further use of a number of expressions marketing our products in Sweden, under the penalty of liquidated damages of SEK 2 million per expression,” the prospectus mentioned.
The company cautions that future advertising and marketing might drive different authorized motion.
More lately, Oatly’s Super Bowl advert made headlines, however principally for scary laughter.