Nu sale (MNST, CELH, PEP)
Alani Nu, the energy drink and snack brand founded by personal trainer and social media influencer Katy Hearn is exploring a full or partial sale. According to Reuters, JP Morgan Chase is assisting the company in the sale process. The brand just launched a collaboration with Kim Kardashian which has generated a lot of social media attention. Alani Nu reportedly has EBITDA of $100M. The valuation was said to be over $3B. Alani Nu volume in the scanner data increased 37.4% while price decreased 6.9% in the four weeks that ended June 17.
Energy drinks have been one of the most active areas of M&A recently. Energy drink sales have seen strong sales despite the difficult comparisons this year. Congo Brands, which owns Prime also owns a significant stake in Alani Nu. Which company has an appetite for an energy drink company? My bet is on a strategic making an investment.
Infant formula startup (PRGO)
Bobbie Baby raised $70M in a Series C round of financing. The company is a baby formula delivery startup that sells DTC and offers a subscription service.
The infant formula startup has reached $100M in revenue, feeding over 300,000 babies. The company currently has more than 5% of the non-WIC formula market. The company raised the capital to acquire Nature’s One. Nature One brings a formula production facility and the Baby’s Only brand which has 15% of the non-WIC market.
The WIC formula market would be difficult for Bobbie Baby to penetrate and it would also be at lower margins. The company raised $50M in a series B round last year, bringing the total capital raised to $142M. The subscription model is still appealing for venture funds. Perrigo supplies Bobbie Baby infant formula.
Less money, more problems (APPH)
AppHarvest is facing another loan repayment demand days after Mastronardi Produce filed to terminate its lease at a different indoor grow facility. Rabo AgriFinance is demanding repayment on its $47.2M loan tied to the company’s main facility in Moreland, Kentucky. AppHarvest’s loans include cross-default provisions so the new demands were expected after the Mastronardi filing. Mastronardi sought to terminate the lease due to minimum production volumes not being met, not due to missing payments. Mastronardi is AppHarvest’s distributor, but not much of a partner apparently (and predictably). The indoor grow bubble was financed by ESG investors, but years later the industry that was being disrupted will be absorbing the assets at significant discounts.
Grocery store traffic (KR, ACI)
Traffic to grocery stores nationwide firmed in Q2 after declining for much of the inflationary surge. In Q2, only two of the 13 weeks saw a significant decrease in weekly traffic. Since the week of May 8, traffic to grocery stores has remained nearly flat with the prior year. With food away from home CPI outpacing at home as well as the expiration of SNAP pandemic benefits, the consumer is responding predictably to save on food spending.
