Protein shake seller BellRing raises US$480m in low-end IPO

[SAN FRANCISCO] BellRing Brands, a spinoff of Post Holdings' active nutrition unit selling protein shakes, bars, and powders, raised US$480 million in an initial public offering (IPO), meeting the low end of its listing expectations by increasing the number of shares sold while lowering their price below the marketed range.

In what might still be the biggest IPO of the fourth quarter, the Post spinoff sold about 34.3 million shares for US$14 each on Wednesday, according to a statement confirming a report by Bloomberg. The company had earlier offered 30 million shares for US$16 to US$19 each.

BellRing's IPO still fell short of the US$570 million it was seeking to raise at the top end of that range. That could portend deepening skepticism among investors, even for companies with strong consumer brands and without aspirations for tech-level valuations.

This year's swell of tech and tech-related IPOs peaked with Uber Technologies' US$8.1 billion listing in May. Dismal performances by two offerings topping US$1 billion in September - SmileDirectClub and Peloton Interactive - combined with the collapse of WeWork's plans to go public have led to a clearing of the listing decks.

The same day as Peloton's shares began trading and fell 13 per cent, entertainment company Endeavor Group first scaled back its planned US$619 million share sale and then cancelled it. On Wednesday, Endeavor officially withdrew its application for an IPO.

POSHMARK, POSTMATES

Companies including fashion resale platform Poshmark and food delivery service Postmates could delay offerings until next year, people familiar with their plans have said.

The only other pending US listing in BellRing's league based on current filings and data compiled by Bloomberg is China-based CloudMinds. It filed in July for a listing of US$500 million, a placeholder that will likely change if it decides to move ahead with an IPO.

BellRing markets and distributes ready-to-drink protein shakes and other athlete-focused products like powders, nutrition bars and supplements. That's a fast-growing category as US consumers increasingly embrace keto diets and lower-carb food choices, triggering rapid growth in an otherwise laggard packaged-food sector.

CEO, PROFIT

Darcy Horn Davenport, who was president of the active nutrition division under Post, will be chief executive officer of the new company, according to the company's regulatory filings.

BellRing had a profit of US$96 million profit on net sales of US$640 million during the nine months ended June 30, up 5.3 per cent from US$608 million during the same period the previous year, according to its filings. The St Louis-based company said its gross profit margin rose to 37 per cent for the same period, up from 34 per cent a year ago.

The Class A shares offered in the IPO will carry one vote each. Class B shares, which will be owned by Post, will give it 67 per cent of the total voting power as long as Post or its affiliates own more than half of BellRing.

The offering was led by Morgan Stanley, Citigroup, JPMorgan Chase & Co and Goldman Sachs Group, according to the filing. The company's share are expected to begin trading on Thursday on the New York Stock Exchange under the symbol BRBR.

BLOOMBERG