CHO plans to raise $100 million by the end of 2021

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Chobani Inc. is best known for its original flagship product, Greek Yogurt. But the company has expanded in recent years to produce a wide range of new items. This includes new types of yogurt, including non-dairy yogurt substitutes, and other food products such as oat milk, dairy and non-dairy coffee creamers, ready-to-drink coffee and beverages. of plants.

Chobani has applied for an IPO through an initial public offering (Initial Public Offering) 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 trading on the Nasdaq under the symbol “CHO”. Chobani did not disclose the number of shares it plans to sell, the initial offering price or the exact date of the offering in its S-1 registration form filed with the Securities and Exchange Commission (SECOND). Although Chobani said he plans to raise $100 million, this is a figure commonly used in IPO filings for the sole purpose of calculating filing fees. The actual amount of money Chobani raises could vary significantly from this number.

Key points to remember

  • Chobani is a food company that manufactures yogurts, oat milk, coffee creamers, ready-to-drink coffee and plant-based probiotic drinks.
  • Chobani will go public on the Nasdaq under the symbol “CHO” on an unspecified date in 2021.
  • The company said it expects to raise around $100 million, but it did not disclose the number of shares to be sold or the offering price.
  • Chobani was estimated at $10 billion in July 2021.
  • Chobani generated $419.7 million in net sales last quarter and posted a net loss of $12.1 million.
  • On October 14, 2021, Chobani elected to be treated as a public benefit corporation, which means the company can take actions that do not maximize shareholder value.
  • CEO Hamdi Ulukaya will hold the majority of 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, the general manager of the company (CEO) and president. Ulukaya came across an advertisement for the sale of a closed yogurt factory in New Berlin, New York, which was previously owned by a large food conglomerate. After visiting the dilapidated old factory, Ulukaya saw the potential of the factory and the people who worked there before. He took out a small business loan, bought the factory, and rehired five of the former employees. Together, they sketched out a strategy that would eventually lead to the sale of the company’s first Greek yogurt in 2007.

Chobani built on the success of its yogurt and began offering a line of yogurt products that quickly gained market share in the United States. The company says that from the start it has been focused on building a unique brand. 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 creamer, 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 significantly affected by its business activities. Because of this, Chobani can now perform certain actions that do not maximize shareholder value.

Chobani Financiers

Chobani provided recent financial results in its S-1 registration form. For its fiscal 2021 third quarter, which ended September 25, 2021, the company reported a net loss of $12.1 million, widening significantly from net loss of $1.0 million in quarter of the previous year. Third quarter net sales increased 14.9% year over year (YEAR) at $419.7 million. Chobani 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 of the previous year.

Chobani net sales in North America represent approximately 91% of total net sales. International net sales account for the remaining 9%. North America Segment Adjusted EBITDA represents nearly 90% of the company-wide Adjusted EBITDA. International sales comprise the remaining 10%. Chobani said he has experienced a drop in sales of certain products in certain markets that have been affected by the COVID-19 pandemic.

Over the past five years, Chobani increased annual net sales by $1.3 billion in its 2016 fiscal year (AF) to $1.4 billion in fiscal year 2020. Growth, however, has been uneven over this period. Annual net sales increased 7.0% in fiscal 2017 before falling 6.5% in fiscal 2018. Growth resumed in fiscal 2019 with net sales in 3.2% increase. Growth accelerated to a 5.2% pace 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.

The total of Chobani book valuethe 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, representing negative equity and is a red flag for many investors. Total Cash and cash equivalents Chobani’s balance sheet at the end of the third quarter was $65.9 million, down 27.2% from the prior year quarter.

Chobani plans to use the net proceeds of funds raised from the IPO to: repay debt; purchase Class B shares of Chobani Global Holdings LLC, the company’s predecessor, held indirectly by Founder, CEO and Chairman Ulukaya; purchase Class M shares from certain executives; and fund a portion of the consideration due to the Ontario Health Care Pension Plan (HOOPP) Trust Fund related to the merger of HOOPP Capital Partners (Greek) LLC in Chobani.

One of Chobani’s key metrics is its market share in the US yogurt market. This market share has gradually increased over the past few 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 fell 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 Key Financials
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 US Yogurt Market Share (%) 20.1 19.0

Source: Chobani Form S-1

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 secured a $750 million loan from private equity firm TPG Capital. Although the funding round is not based on any specific valuation, Chobani said at the time that his company was worth around $5 billion.

Chobani’s major institutional shareholders are HOOPP and FHU US Holdings LLC, which is controlled by Ulukaya. As such, the company is currently owned by Ulukaya, its employees and HOOPP.

Main Competitors of Chobani and Additional IPO Details

Chobani faces competition in its product portfolio from large national and international companies as well as some smaller manufacturers and private labels. Among its competitors are the yoghurt brands Yoplait and Dannon, the latter belonging to the French company Danone SA (BORN). Other rivals include dairy company Stonyfield Farm, food company Zen Monkey LLC and Swedish company Oatly Group AB (OTLY).

Following the IPO, CEO Ulukaya will hold the majority of outstanding voting rights. Since it will be able to control certain matters subject to a shareholder vote, the company should be considered a “controlled company” within the meaning of Nasdaq’s corporate governance standards. This means that the company is not required to comply with certain corporate governance requirements, such as those relating to the company’s independent directors, executive compensation and other corporate matters.

The essential

Food company Chobani is expected to go public through an IPO sometime in 2021. The company has not disclosed the initial offering price for its shares or the total number of shares it is considering. to sell. But he hopes to raise around $100 million. The company is estimated to be worth around $10 billion. Following completion of the offer, Chobani’s shares will trade on the Nasdaq under the symbol “CHO”.

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