My Food Bag completes largest New Zealand IPO in seven years

AVCJ Research’s records indicate it is also the second-biggest PE-backed offering on the New Zealand Stock Exchange to date. It trails only Z Energy Holdings, a fuel distributor that counted New Zealand Superannuation Fund among its investors, which raised NZ$840 million in 2013. Third spot is held by poultry producer Tegel, then owned by Affinity Equity Partners. It raised NZ$298 million in 2016.

My Food Bag sold 185 million shares at NZ$1.85 apiece, implying a post-IPO market capitalization of NZ$448.5 million and a 22.4x forward earnings multiple. The stock – which is listed in Australia as well as New Zealand – opened at NZ$1.75 on March 5 and closed at NZ$1.70. As of mid-afternoon trading on March 8, it was at NZ$1.69.

More than four-fifths of the offering comprised existing shares, with Waterman realizing NZ$193.9 million as it reduced its holding from 66.35% to 15%. The private equity firm’s remaining interest is worth NZ$61.5 million. Waterman acquired a majority stake in My Food Bag in October 2016 for a reported valuation of NZ$80 million. The investment came from its third fund, which closed in March of the same year at the hard cap of NZ$200 million.

“Today marks the culmination of eight years’ work. We’ve grown from a Kiwi start-up beginning life on the kitchen bench to becoming a New Zealand food powerhouse, inspiring thousands of Kiwi families to eat better each night of the week,” said Tony Carter, My Food Bag’s chairman, in a statement.

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 on 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.

Kevin Bowler, CEO of My Food Bag, added that the company’s feedback database tracks local cooking and dining preferences. “Our data show us that New Zealand lamb is currently a firm favorite,” he said. “Our Valentine’s Day lamb rack with twice cooked potatoes, as well as our rosemary mustard lamb rack with almond broccoli and smoky aioli are currently this year’s highest ranked recipes.”

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