CHO plans to raise $ 100 million by end of 2021
Chobani Inc. is best known for its original flagship product, Greek yogurt. But the company has grown in recent years to produce a wide range of new items. This includes new types of yogurt, including dairy-free yogurt substitutes, and other food products such as oat milk, dairy and non-dairy coffee creamers, ready-to-drink coffee, and soft drinks. herbal.
Chobani filed for an IPO through an Initial Public Offering (IPO) on November 17, 2021 amid renewed investor interest in health-focused and socially responsible companies. Following the IPO, the company expects the shares of its Class A common stock to trade on the Nasdaq under the ticker symbol “CHO”. Chobani did not disclose the number of shares he plans to sell, the initial offering price, or the exact date of the offer in his S-1 registration form filed with the Securities and Exchange Commission ( DRY). Although Chobani has said he plans to raise $ 100 million, this is a figure commonly used in IPO applications for the sole purpose of calculating registration fees. The actual amount of money Chobani raises could vary significantly from this number.
Key points to remember
- Chobani is a food company that makes yogurt, oat milk, coffee creamers, ready-to-drink coffee, and plant-based probiotic drinks.
- Chobani will go public on the Nasdaq under the ticker “CHO” on an unspecified date in 2021.
- The company said it plans to raise around $ 100 million, but did not disclose how many shares to sell or the offering price.
- Chobani was estimated at $ 10 billion in July 2021.
- Chobani generated $ 419.7 million in net sales in the last quarter and reported a net loss of $ 12.1 million.
- On October 14, 2021, Chobani elected to be treated as a public benefit corporation, meaning the company can take actions that do not maximize shareholder value.
- CEO Hamdi Ulukaya will hold a majority of the outstanding voting rights immediately after the IPO, which should make Chobani a “controlled company” by Nasdaq corporate governance standards.
Chobani was founded in 2005 by Hamdi Ulukaya, CEO and President of the company. Ulukaya came across an advertisement for the sale of a shuttered yogurt factory in New Berlin, New York, previously owned by a large food conglomerate. After visiting the old dilapidated factory, Ulukaya saw the potential of the factory and the people who had worked there before. He took out a small business loan, bought the plant, and rehired five of the former employees. Together, they defined a strategy that would ultimately lead to the sale of the company’s first Greek yogurt in 2007.
Chobani built on the success of its yogurt and began to offer a line of yogurt products that quickly gained market share in the United States. CEO Ulukaya wants the brand to represent the company’s commitment to making high-quality, delicious and healthy food, as well as working to bring about positive social and environmental change. Chobani eventually expanded its product offering to include other food categories, such as oat milk and coffee cream, both of which launched in 2019.
On October 14, 2021, Chobani elected to be treated as a public benefit corporation. This means that the company must balance the best financial interests of its shareholders with the best interests of all stakeholders materially affected by its business operations. For this reason, Chobani can now perform certain actions that do not maximize shareholder value.
Chobani provided recent financial results in his S-1 entry form. For its fiscal third quarter 2021, which ended September 25, 2021, the company reported a net loss of $ 12.1 million, up sharply from the quarter’s net loss of $ 1.0 million. of the previous year. Third quarter net sales increased 14.9% year over year (YOY) to $ 419.7 million. Chobani’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), which is based on the combined earnings of its individual geographic segments, was $ 42.1 million in the third quarter. This is a sharp drop in Adjusted EBITDA compared to the same quarter a year earlier.
Chobani’s net sales in North America represent approximately 91% of total net sales. International net sales represent the remaining 9%. Adjusted EBITDA for the North America segment represents almost 90% of Adjusted EBITDA company-wide. International sales include the remaining 10%. Chobani said he has experienced a decline in sales of some products in some markets that have been affected by the COVID-19 pandemic.
Over the past five years, Chobani has increased its annual net sales from $ 1.3 billion in fiscal 2016 to $ 1.4 billion in fiscal 2020. However, growth has been uneven over the years. during this period. The annual turnover increased by 7.0% in the fiscal year 2017 before falling by 6.5% in the fiscal year 2018. Growth resumed in the fiscal year 2019 with a turnover business up 3.2%. Growth accelerated at a rate of 5.2% in fiscal 2020. The company’s net loss that year was $ 58.7 million, about three times the net loss. of the 2019 financial year.
Chobani’s total book value, the difference between its assets and liabilities, was – $ 668.3 million as of September 25, 2021. The negative balance means that the company’s liabilities are greater than its assets, which is negative equity and is a red flag for many investors. Total cash and cash equivalents on Chobani’s balance sheet at the end of the third quarter was $ 65.9 million, down 27.2% from the previous year quarter.
Chobani plans to use the net proceeds of funds raised during the IPO for the following operations: repay debt; purchase Class B shares of Chobani Global Holdings LLC, the company’s predecessor, which are indirectly owned by Founder, CEO and Chairman Ulukaya; purchase Class M units of certain officers; and fund a portion of the consideration owed to the Healthcare of Ontario Pension Trust Fund (HOOPP) related to the merger of HOOPP Capital Partners (Greek) LLC with Chobani.
One of Chobani’s key metrics is its market share in the US yogurt market. This market share has gradually increased in recent years. In the first quarter of fiscal 2018, the company’s share of the U.S. yogurt market was 17.1%. Since then, Chobani has steadily gained market share. It rose to 17.8% in the first quarter of 2019, to 18.6% in the first quarter of 2020, and then to 20.1% at the end of the third quarter of fiscal 2021.
|Chobani’s Key Financial Columns|
|Quarter ended September 25, 2021||Quarter ended September 26, 2020|
|Net sales ($ M)||419.7||365.4|
|Net loss ($ M)||12.1||1.0|
|Total market share of yogurt in the United States (%)||20.1||19.0|
Source: Chobani S-1 Form
How much is Chobani worth?
In early July 2021, Chobani confidentially filed for an IPO. People familiar with the matter told Reuters the company could be valued at more than $ 10 billion. Seven years earlier, in April 2014, the company had secured a $ 750 million loan from private equity firm TPG Capital. While the round was not based on any specific valuation, Chobani said at the time that his company was worth around $ 5 billion.
The main institutional shareholders of Chobani are HOOPP and FHU US Holdings LLC, which is controlled by Ulukaya. Thus, the company is currently owned by Ulukaya, employees and HOOPP.
Key Chobani Competitors and Additional IPO Details
Chobani faces competition in its product portfolio from large national and international companies as well as some small manufacturers and private labels. Among its competitors are the yogurt brands Yoplait and Dannon, the latter belonging to the French company Danone SA (BN). Other competitors include dairy company Stonyfield Farm, food and beverage company Zen Monkey LLC, and Swedish company Oatly Group AB (OTLY).
Following the IPO, CEO Ulukaya will own the majority of the outstanding voting rights. Because it will be able to control certain matters put to the vote of the shareholders, the company should be considered a “controlled company” as defined by the standards of corporate governance of the Nasdaq. This means that the company is not obligated to comply with certain corporate governance requirements, such as those relating to independent company directors, executive compensation and other corporate matters.
The bottom line
Food company Chobani is expected to go public through an IPO sometime in 2021. The company has not disclosed the initial offering price of its shares or the total number of shares it has. considering selling. But he hopes to raise around $ 100 million. The company is estimated to be worth around $ 10 billion. Following the closing of the offer, the shares of Chobani will trade on the Nasdaq under the symbol “CHO”.