Plant-based foodmaker Huel has consulted bankers to advise on a stock market listing in London thanks to rising demand for its products from fitness-focused customers.
The company, which makes “complete food” powders, drinks, and snacks, said it is exploring its options, with an initial public offering (IPO) being its preferred choice to fund future growth.
It is currently working with Goldman Sachs (GS) and JPMorgan (JPM), with a potential flotation taking place as soon as next year. The move could value it at up to £1bn ($1.33bn).
The banks are also advising on a potential sale of the business in a dual-track process, according to the FT, which cited people briefed on the matter.
It comes amid a growing demand for plant-based meal replacements and a fitness boom during the COVID-19 pandemic.
Huel’s products are made from plant ingredients such as oats, coconut and flax seeds, containing as many as 26 essential vitamins and minerals, it says.
Its vegan and lactose-free ingredients have been a hit with health-conscious millennials in particular. The company website claims loyal customers, known as “Hueligans”, who use Huel products can save themselves five hours of meal preparation time a week.
The Hertfordshire-based was established in 2015 by Julian Hearn, who holds a 53% stake in the firm, after he sold Mash Up Media, an affiliate marketing company.
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Huel, or “human fuel”, has since taken off overseas, with recent expansions into the US, Japan, and continental Europe. A bulk of its revenue comes from online sales, including its subscription service.
The group posted revenue of £71.6m for the year to July 2020, up from £50.2m a year before, according to its most recent accounts filed at Companies House. Operating profit for the 12 months to July last year came in at £700,000.
Venture fund Highland Europe is a significant shareholder in the company, which invested £20m in 2018, valuing Huel at £220m at the time.
It comes as the number of stock market listings across the globe this year has surpassed all initial public offering (IPO) activity throughout 2020, new data has shown.
According to EY, global volumes have risen 87%, and proceeds have increased by 99% year-on-year.
The data showed that the most recent quarter of 2021 was the most active third quarter by deal number and proceeds in the past 20 years.
Quarter three saw 18% more deals than the previous third quarter record, which was set in 2007, and 11% higher proceeds than the last record-setting Q3 in 2020.
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Technology firms, healthcare and industrials continued to lead the charge, with added interest in special purpose acquisition companies (SPACs).
SPACs, or so-called “black cheque” companies, have boomed in popularity over the last year. They are companies with no business operations that raise money through a stock market listing and then use that money to buy another business.
SPAC investors are typically retail investors and these structures can give them access to private investments they would otherwise not be able to reach. For companies that sell to SPACs, these types of deals offer a quick and relatively easy way to list on the stock market.
More than $100bn has been raised through SPACs in just the past 12 months and the total raised in 2021 has already surpassed that of 2020.
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