Above Food eyes IPO in deal with Bite Acquisition

02 May 2023 --- Above Food and Bite Acquisition are combining their businesses and pursuing an initial public offering (IPO) on the NYSE during the second half of 2023. Under the Above Food name, the merged company will leverage its vertically integrated supply chain to deliver specialty ingredients to over 35,000 retail distribution points.

The company plans to go public amid a challenging macroeconomic year, with inflation at multi-decade highs and limited money access, as interest rates have surged during the last months. In 2022, the number of IPOs in the US set a 32-year low as companies struggled to raise funds to go public.

Nevertheless, Above Food will go ahead with the IPO as the company names food scarcity and insecurity and global supply chain disruptions “demand drivers” and “macroeconomic tailwinds.” Since the company reveals it can take strategic advantage of the current economic situation with its vertically integrated sourcing, traceability systems and regenerative systems supply chain.

The definitive business combination agreement values the company at US$319 million. Upon closing the transaction, Above Food will become a public company and will be listed under the ticker symbol “ABVE”.

Well-positioned in the chaos
The company expects to grow its revenue this year through to January 2024 to US$482 million, representing an 80% two-year revenue CAGR.

“As food insecurity escalates and the global food supply chain becomes more fragile and subject to disruption, we believe Above Food is well-positioned to ensure communities and consumers around the globe have access to nutritious ingredients that are grown and harvested according to sustainable farming methods,” says Lionel Kambeitz, president and CEO of Above Food. 

Above Food aims to tap a US$200 billion plant-based substitute categories and adjacents market.The company aims to tap a US$200 billion plant-based substitute categories and adjacents market.

“While our business spans regenerative agriculture, ingredients manufacturing and consumer products – we believe the way in which we bring these businesses together makes Above Food a novel and differentiated solution to help tackle these growing global issues,” he explains. 

“We take custody of quality plant proteins from some of the best-growing regions in the world, we utilize our complementary physical asset base of ingredient terminals and rail cars to consolidate our sourcing, and then we leverage those assets to create sought-after and differentiated ingredients and CPG brands to generate value and enhance our margins,” Kambeitz continues.

Above Food is expected to generate US$44 million of gross proceeds, of which US$9 million have already been committed, with the money going to fund future facility development and working capital purposes.

No hunger for IPOs
2023 and 2022 have been tranquil years concerning IPOs in the F&B sector, compared to 2021, year that saw the IPO’s of Oatly, Steakholder Foods, Dole, Zevia, Sovos Brands, Vita Coco, etc. 

In January, Olam announced its plans to pursue a listing of its agribusiness unit in Singapore and Saudi Arabia this year, with Singapore as the primary listing and Saudi Arabia as a potential opportunity for a concurrent listing.

In November, Indian sweets and snacks maker Bikaji Food International launched an IPO and debuted in the National Stock Exchange of India and the Bombay Stock Exchange.

Yogurt maker Chobani opted not to go public last year, withdrawing from its third attempt of attempting an IPO due to the turbulent market conditions. Choubani decided not to go public in January 2022 and in July 2021. 

By Marc Cervera