Waterman set for $140m windfall from My Food Bag IPO

My Food Bag will sell as many as 185 million shares for NZ$1.85 apiece to raise NS$342.2 million, according to a prospectus. This equates to an enterprise valuation (EV) of NZ$448.5 million and an EV-to-pro forma multiple of 16.7x based on forecasted performance for the 2021 financial year.

The offer comprises only 29.6 million new shares, with the bulk of the proceeds from the secondary offering going to Waterman, which will reduce its holding from 66.35% to 15%. CEO Kevin Bowler and CFO Mark Winter will also sell a portion of their shares.

Waterman acquired a majority stake in My Food Bag in October 2016 for a reported valuation of NZ$80 million. The objective was to provide expansion capital ahead of an IPO within three years. The private equity firm committed capital from its third fund, which closed in March of the same year at the hard cap of NZ$200 million.

My Food Bag was founded in 2013 by Nadia Lim alongside her husband and several other investors. Lim rose to fame as the winner of MasterChef New Zealand in 2011 and went to release various food-themed television shows and cookbooks. Her “nude food” philosophy is based on healthy and nutritious recipes that use natural, unprocessed ingredients.

The company has delivered more than 85 meals to 300,000 customers in New Zealand under the My Food Bag, Bargain Box, and Fresh Start brands, as well as the recently introduced Made ready-meal service. It offers 10,000 different recipes – an 18-strong team of chefs, food stylists, photographers and a nutritionist develop 20 new ones each week – and sources 98% of ingredients locally.

New Zealand’s food retail sales came to NZ$37 billion in 2019, with about NZ$1.5 billion of that transacted through online channels. The market is dominated by traditional grocery store operators Foodstuffs and Woolworths, both of which now offer online delivery services. My Food Bag’s major meal kit competitors are HelloFresh and Woop.

The company generated NZ$153.3 million in revenue for the 12 months ended March 2020, the same as the previous year. Net profit came to NZ$8.2 million in 2020; no comparative figure is given for 2019. Forecast revenue and net profit for the 2021 financial year is NZ$189.5 million and NZ$800,000, respectively.

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• Topics
• Australasia
• IPO
• Consumer
• Technology
• New Zealand
• Waterman Capital