PowerBar Maker BellRing Climbs After $480 Million IPO

(Bloomberg) -- PowerBar maker BellRing Brands Inc. rose 18% 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 Wednesday while pricing them at $14 each, below the marketed range of $16 to $19 each. BellRing closed at $16.50 Thursday in it trading debut in New York, giving it a market value of $566 million.

The listing by Post Holdings Inc. spinoff might still be the biggest of the fourth quarter, even though it fell short of the $570 million it was seeking to raise at the top of its targeted range. BellRing lackluster showing -- even with its trading gains -- could portend deepening skepticism among investors, even for companies with strong consumer brands and without aspirations for tech-level valuations.

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.

To contact the reporters on this story: Crystal Tse in New York at ctse44@bloomberg.net;Michael Hytha in San Francisco at mhytha@bloomberg.net

To contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Michael Hytha, Matthew Monks

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