PowerBar maker BellRing climbs after low-range $480 million IPO

PowerBar maker BellRing Brands Inc. climbed as much as 14% in its trading debut after raising $480 million in an initial public offering that yielded results at the low-end of its target.
 

The company reached that mark by increasing the number of shares sold while lowering their price.

In what might still be the biggest IPO of the fourth quarter, the Post Holdings Inc. spinoff sold about 34.3 million shares for $14 each on Wednesday. The company had earlier offered 30 million shares for $16 to $19 each.

BellRing’s IPO still fell short of the $570 million it was seeking to raise at the top end of that range. That could portend deepening skepticism among investors, even for companies with strong consumer brands and without aspirations for tech-level valuations.

The shares, which opened at $15.50, were up 13% at to $15.87 at 11:33 a.m. in New York trading Thursday, giving the company a market value of $543 million.

This year’s swell of tech and tech-related IPOs peaked with Uber Technologies Inc.’s $8.1 billion listing in May. Dismal performances by two offerings topping $1 billion in September -- SmileDirectClub Inc. and Peloton Interactive Inc. -- combined with the collapse of WeWork’s plans to go public have led to a clearing of the listing decks.

The same day as Peloton’s shares began trading and fell 13%, entertainment company Endeavor Group Holdings Inc. first scaled back its planned $619 million share sale and then canceled it. On Wednesday, Endeavor officially withdrew its application for an IPO.

Poshmark, Postmates

Companies including fashion resale platform Poshmark Inc. and food delivery service Postmates Inc. could delay offerings until next year, people familiar with their plans have said.

The only other pending U.S. listing in BellRing’s league based on current filings and data compiled by Bloomberg is China-based CloudMinds Inc. It filed in July for a listing of $500 million, a placeholder that will likely change if it decides to move ahead with an IPO.

BellRing markets and distributes ready-to-drink protein shakes and other athlete-focused products like powders, nutrition bars and supplements. That’s a fast-growing category as U.S. consumers increasingly embrace keto diets and lower-carb food choices, triggering rapid growth in an otherwise laggard packaged-food sector.

CEO, Profit

Darcy Horn Davenport, who was president of the active nutrition division under Post, is chief executive officer of the new company, according to the company’s regulatory filings.

BellRing had a profit of $96 million profit on net sales of $640 million during the nine months ended June 30, up 5.3% from $608 million during the same period the previous year, according to its filings. The St. Louis-based company said its gross profit margin rose to 37% for the same period, up from 34% a year ago.

The Class A shares offered in the IPO carry one vote each. Class B shares, which are owned by Post, give it 67% of the total voting power as long as Post or its affiliates own more than half of BellRing.

The offering was led by Morgan Stanley, Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc., according to the filing. The company’s share trading on the New York Stock Exchange under the symbol BRBR.