The Honest Company IPO (HNST)
We are hosting a Black Box Pre-IPO review of The Honest Company today at 2PM.
The Honest Company competes in a very large TAM, with growth being driven by focusing on the clean/natural market. The company’s strategic formula – 15% top-line growth, gross margin expansion of 1000bps (>100bps annually), and EBITDA margin expansion of1000 bps (>100bps annually) is compelling.
Nestle is purchasing The Bountiful Company soon after it filed its registration statement to go public (additional details below). The Honest Company is also a strategic asset for a consumer packaged goods company. Not being acquired during the roadshow like The Bountiful Company probably has more to do with the shareholder base of The Honest Company and the dilution that an acquisition would cause at this stage of its profitability than its attractiveness as a target.
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CLICK HERE for the webcast and slides. Participating Dialing Instructions Toll-Free: UK: 0 Confirmation Number: 13719465 |
USDA produce outlook (APPH)
According to the USDA’s Food Price Outlook, fresh fruit prices increased 0.7% from February to March. Compared to March 2020, fresh fruit prices were 5.6% higher. The recent increases have largely been driven by higher apple and citrus prices. The USDA projects food at home prices to increase between 1-2% and food away from home prices to increase between 2.5-3.5%. Farm-level prices of several vegetables have experienced large decreases, including lettuce and tomatoes. The USDA projects fresh fruit prices to increase between 2-3% this year. Farm-level vegetable prices are expected to decrease between 1-4% compared to last year. It’s not a surprise with the increase in vertical farms that lettuce and tomato prices would be under pressure.USDA produce outlook (APPH)
Nestle Buys The Bountiful Company (NESN-SWX)
Nestle has purchased the main vitamin and supplements brands of The Bountiful Company for $5.75B. Nestle purchased the vitamin brands from KKR, but not the sports and active nutrition brands Pure Protein, Body Fortress, and MET-Rx. The acquired brands had sales of $1.87B and an EBTIDA margin of 18.3%. Nestle is paying 3.1x sales and 16.8x EBITDA.
