Hello Fresh plans €300m IPO

Iain Gilbert WebFG News | 10 Oct, 2017 14:26 - Updated: 14:27 | | |

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German meal-kit startup Hello Fresh announced on Tuesday that it planned to sell up to €300m worth of stock as part of its second attempt at an initial public offering (IPO) aimed at financing its expansion into North America, despite its rival Blue Apron being heralded as "the IPO bust of the decade" following its flotation back in June.

Dominik Richter, co-founder and chief executive of Hello Fresh, said, "The public listing marks the next logical step to further expand our business, to secure our position as the leading global player and to pursue our long-term growth strategy."

Hello Fresh had originally intended to float its shares in 2015, but decided to pull the offering after investors showed reluctance to buy into its multi-billion EUR valuation, however, Richter was seemingly confident that Hello Fresh would be able to take advantage of the fact that the IPO of its main competitor, Blue Apron, was blown out of the water as a result of Amazon's unexpected decision to purchase prosperous US grocer Whole Foods.

The company made subtle references to the competition posed by Amazon, but said its "innovative" supply chain would create a "competitive moat" around Hello Fresh as more than 50% of its supplies are made up of local produce that came directly from producers, and that its "sizable infrastructure, optimised to produce meal kits at scale," also accommodated "increased choice and flexibility" for its customers.

While Hello Fresh sales had continued to report accelerated growth, generating revenue of €435.4 in the six months leading to 30 June, as opposed to the €291.5m it had collected at the same time a year earlier, the company continued to post losses as LBITDA increased from €45.7m to €46.5m.

The FRA-listed firm said on Tuesday that its "strategic goal is to reach breakeven within the next 15 months," which it said would be helped by "continuous margin improvements."

The IPO was said to consist of IPOs in both Germany and Luxembourg, as well as private placements in both countries and would be jointly run by Berenberg, BNP Paribas, Deutsche Bank, JPMorgan and Morgan Stanley, with Rabobank as the co-lead manager.

As of 1010 BST, Rocket Internet, Hello Fresh's principal backer, had seen shares rise 1.29% to €22.01 each.

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