Chobani Inc. is best known for its original flagship product, Greek yogurt. But the company has expanded in recent years to produce a wide variety of new items. These include new types of yogurt, including non-dairy yogurt alternatives, and other food products such as oat milk, non-dairy and non-dairy creamer, ready-to-drink coffee, and plant-based beverages.
Chobani applied for an initial public offering (IPO) on November 17, 2021, when investor interest in health-oriented and socially responsible companies increased. After the IPO, the company expects shares of its Class A common stock to trade on the Nasdaq under the ticker symbol “CHO”. Chobani has not disclosed the number of shares to be sold, the initial offering price, or the exact date of the offering on its S-1 registration document filed with the Securities and Exchange Commission (SEC). While Chobani said it is expected to raise $ 100 million, it’s a commonly used number in IPO filings and is used solely to calculate a registration fee. The actual amount of money that Chobani collects can vary widely from this number.
The central theses
- Chobani is a food company that makes yogurt, oat milk, creamer, ready-to-drink coffee, and plant-based probiotic beverages.
- Chobani will go public on Nasdaq under the ticker “CHO” on an unspecified date in 2021.
- The company said it is expected to raise $ 100 million, but it did not disclose the number of shares to sell or the offer price.
- Chobani was valued at $ 10 billion in July 2021.
- Chobani posted net sales of $ 419.7 million and a net loss of $ 12.1 million for the most recent quarter.
- On October 14, 2021, Chobani chose to be treated as a not-for-profit corporation, which means the company may take steps that do not maximize shareholder value.
- CEO Hamdi Ulukaya will own a majority of the voting rights immediately after the IPO, which is expected to make Chobani a “controlled company” under Nasdaq’s corporate governance standards.
Chobani was founded in 2005 by Hamdi Ulukaya, the company’s Chief Executive Officer (CEO) and chairman. Ulukaya came across an ad for the sale of a closed yogurt factory in New Berlin, New York that was previously owned by a large food company. After visiting the old, run-down factory, Ulukaya saw potential in the facility and the people who had previously worked there. He took out a small loan, bought the factory and hired five of the former employees. Together they devised a strategy that would eventually lead to the company’s first Greek yogurt being sold in 2007.
Building on the success of his yogurt, Chobani began offering a range of yogurt products that were rapidly gaining market share in the United States. The company says it has focused on building a single brand from the start. CEO Ulukaya wants the brand to represent the company’s commitment to producing high quality, delicious and healthy food, as well as positive social and environmental change. Finally, Chobani expanded its product range to include other food categories such as oat milk and coffee creamer, both of which came on the market in 2019.
On October 14, 2021, Chobani chose to be treated as a not-for-profit corporation. This means that the company must weigh the best financial interests of its shareholders against the best interests of all stakeholders materially affected by its business. Because of this, Chobani can now take certain actions that will not maximize shareholder value.
Chobani disclosed the latest financial results on its S-1 registration form. For the third fiscal quarter of 2021, which ended September 25, 2021, the company reported a net loss of $ 12.1 million, up significantly from a net loss of $ 1.0 million for the prior year quarter. Third quarter net sales increased 14.9% year over year to $ 419.7 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for Chobani, based on combined earnings for each geographic segment, was $ 42.1 million for the third quarter. That was a sharp decline in adjusted EBITDA compared to the prior-year quarter.
Chobani’s net sales in North America account for approximately 91% of total sales. The remaining 9% is accounted for by net international sales. Adjusted EBITDA for the North America segment represents nearly 90% of company-wide adjusted EBITDA. Foreign sales make up the remaining 10%. Chobani said it had seen a decline in sales of some products in certain markets affected by the COVID-19 pandemic.
Over the past five years, Chobani has grown its annual net sales from $ 1.3 billion in FY 2016 (FY) to $ 1.4 billion in FY 2020. However, growth was uneven during this period. Annual net sales rose 7.0% in FY 2017 before declining 6.5% in FY 2018. The growth continued in FY 2019 with a 3.2% increase in net sales. Growth accelerated to 5.2% in FY 2020. The company’s net loss for that year was $ 58.7 million, roughly three times its FY 2019 net loss.
Chobani’s total book value, the difference between assets and liabilities, was $ -668.3 million as of September 25, 2021. The negative balance means the company’s liabilities are higher than its assets, which is negative equity and a red flag for the company. is many investors. Total cash on Chobani’s balance sheet at the end of the third quarter was $ 65.9 million, 27.2% less than the year-ago quarter.
Chobani plans to use the net proceeds from the IPO to: pay back debt; Acquire Class B shares in Chobani Global Holdings LLC, the company’s predecessor, indirectly owned by Founder, CEO and Chairman Ulukaya; Acquisition of Class M Shares from certain executives; and fund a portion of the consideration from the Healthcare of Ontario Pension Plan Trust Fund (HOOPP) in connection with the merger of HOOPP Capital Partners (Greek) LLC with Chobani.
One of Chobani’s most important metrics is its market share in the US yogurt market. This market share has increased gradually over the past few years. In the first quarter of FY 2018, the company’s share of the US yogurt market was 17.1%. Since then, Chobani has steadily gained market share. It rose to 17.8% in the first quarter of 2019, to 18.6% in the first quarter of 2020 and then to 20.1% at the end of the third quarter FY 2021.
|Chobani financial metrics|
|Quarter ends on September 25, 2021||Quarter to September 26, 2020|
|Net Sales ($ M)||419.7||365.4|
|Net loss ($ M)||12.1||1.0|
|Total US Yogurt Market Share (%)||20.1||19.0|
Source: Chobani S-1 form
How much is Chobani worth?
At the beginning of July 2021, Chobani applied for an IPO in confidence. People familiar with the matter told Reuters the company could be valued at more than $ 10 billion. Seven years earlier, in April 2014, the company secured a $ 750 million loan from private equity firm TPG Capital. While the round of funding was not based on any particular valuation, Chobani said at the time that his business was worth about $ 5 billion.
Chobani’s major institutional shareholders are HOOPP and FHU US Holdings LLC, which is controlled by Ulukaya. Thus, the company is currently owned by Ulukaya, employees and HOOPP.
Main Chobani Competitors and Additional IPO Details
Chobani faces competition from large national and international companies as well as certain smaller manufacturers and private labels across its entire product portfolio. Competitors include the yogurt brands Yoplait and Dannon, which are owned by the French Danone SA (BN). Other competitors include dairy company Stonyfield Farm, food and beverage company Zen Monkey LLC, and Sweden-based Oatly Group AB (OTLY).
After the IPO, CEO Ulukaya will advantageously own the majority of the outstanding voting rights. Since it will be able to control certain matters that will be put to a shareholder vote, it is expected that the company will be considered a “controlled company” for the purposes of Nasdaq corporate governance standards. This means that the company is not required to comply with certain corporate government requirements, such as those relating to independent directors of the company, executive compensation, and other corporate matters.
The bottom line
Food company Chobani is expected to go public through an IPO sometime in 2021. The company did not disclose the initial issue price of its shares or the total number of shares it plans to sell. However, it is expected to raise approximately $ 100 million. The company is valued at $ 10 billion. Upon completion of the offering, Chobani shares will be traded on the Nasdaq under the symbol “CHO”.