May 02, 2023 — Above Food and Bite Acquisition are combining their businesses and targeting an initial public offering (IPO) on the NYSE in the second half of 2023. Called Above Food, the combined company will leverage its vertically integrated supply chain to deliver specialty ingredients to over 35,000 retail outlets.
The company plans to go public amid a challenging macro year, with inflation at multi-decade highs and limited access to money as interest rates have risen sharply in recent months. In 2022, the number of IPOs in the US hit a 32-year low as companies struggled to raise funds to go public.
Despite this, Above Food will proceed with the IPO as the company describes food shortages and insecurity and global supply chain disruptions as “demand drivers” and “macroeconomic tailwinds.” The company announces that it can take strategic advantage of the current economic situation with its vertically integrated procurement, traceability and regenerative system supply chain.
The definitive business combination agreement values the company at $319 million. Upon completion of the transaction, Above Food will become a public company and will trade under the ticker symbol ABVE.
Well positioned in the chaos
The company expects to grow its revenue this year to $482 million by January 2024, at a two-year CAGR of 80%.
“As food insecurity escalates and the global food supply chain becomes more vulnerable and disruptive, we believe Above Food is well positioned to ensure communities and consumers around the world have access to nutritious ingredients that are grown and harvested using sustainable farming practices” , says Lionel Kambeitz, President and CEO of Above Food.
Above Food aims to capture a $200 billion market for plant-based substitute categories and related products.The company aims to develop a $200 billion market for herbal replacement categories and related products.
“While our business spans regenerative agriculture, ingredient manufacturing and consumer products, we believe the way we bring these businesses together makes Above Food a novel and differentiated solution to address these growing global problems,” explains he.
“We custodian high-quality plant proteins from some of the best growing regions in the world, we leverage our complementary physical asset base of ingredient terminals and railroad cars to consolidate our sourcing, and then we leverage those assets to source desirable and differentiated ingredients and CPG brands to create value and improve our margins,” continues Kambeitz.
Above Food is expected to generate $44 million in gross revenue, of which $9 million has been committed, with the money used to fund future facility development and working capital purposes.
No hunger for IPOs
2023 and 2022 were quiet years in terms of IPOs in the F&B sector compared to 2021, the year that saw the IPOs of Oatly, Steakholder Foods, Dole, Zevia, Sovos Brands, Vita Coco, etc.
In January, Olam announced plans to seek listing of its agribusiness unit in Singapore and Saudi Arabia this year, with Singapore being the primary listing and Saudi Arabia a potential simultaneous listing opportunity.
In November, Indian confectionery and snacks maker Bikaji Food International launched an IPO, debuting on the National Stock Exchange of India and the Bombay Stock Exchange.
Yoghurt maker Chobani decided against an IPO last year, pulling out of its third attempt at an IPO due to turbulent market conditions. Choubani decided not to go public in January 2022 and July 2021.
By Marc Cervera
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