By Ben Dummett, Miriam Gottfried and Juliet Chung
Swedish oat-milk maker Oatly AB has sold a $200 million stake to
a group led by private-equity giant Blackstone Group Inc. that
includes Oprah Winfrey, Natalie Portman, former Starbucks Corp.
Chief Howard Schultz and the entertainment company founded by
The sale of the roughly 10% stake values Oatly at about $2
billion, according to people familiar with the matter.
The company said it plans to announce the deal as soon as this
week. It is a key step in its path toward a possible initial public
offering sometime over the next 12 to 18 months, some of the people
said. The fast-growing company could also be an acquisition target
for a big food conglomerate.
The deal and valuation underscore the growing popularity of
plant-based foods as consumers seek healthier options with less
impact on the environment. Shares of Beyond Meat Inc., one of the
hottest plant-based food companies in recent years, have rocketed
to around $130 a share since the company went public at $25 last
Oat milk's popularity is soaring -- sales in U.S. stores grew
nearly 300% year-over-year for the 16-week period ended June 20,
according to Nielsen data. Fans say it mixes better with coffee
than other milk substitutes. Oatly says the process of making oat
milk, which involves steeping oats in water, consumes less water
than making almond milk.
The growing appetite for milk alternatives has put pressure on
dairy-milk companies like Dean Foods, which filed for bankruptcy
protection in November.
Ms. Winfrey has shown particular interest in the
health-and-wellness sector. She is an investor in WW International
Inc., formerly Weight Watchers, where she sits on the board.
The Blackstone-led group also includes growth-investment firm
Orkila Capital LLC and the investment arm of Rabobank.
Mr. Schultz is personally investing in Oatly, but the company
does have a relationship with Starbucks. In April, the coffee giant
introduced Oatly in stores across China.
Oatly's founders, brothers Rickard and Björn Öste, will also be
reinvesting in the company as part of the fundraising round.
Founded in the 1990s, Oatly entered the U.S. four years ago. The
company's 2019 sales of about $200 million were roughly double the
previous year. It expects to have similar growth this year,
according to people familiar with the matter. Oatly has been
profitable in the past but lost money in recent years as it
invested in its business, the people said.
Oatly is distributed in Northern Europe, the U.S. and China and
plans to use the money to keep building its supply chain in those
markets and more widely distribute its oat-based yogurt, spreads,
on-the-go drinks and ice cream.
"I've been investing for the last 20 years in food and beverage
brands and have rarely been that impressed by the growth
trajectory," said Eric Melloul, Oatly's chairman and a managing
director at Verlinvest, a Belgian investment holding company
started by founding families of Anheuser-Busch InBev SA.
Oatly's financing brings a prominent U.S. investor on board in
Blackstone, joining lead investors Verlinvest and China Resources,
a Chinese state-owned conglomerate. "We have Asian owners and
European owners and wanted to bring U.S. owners into the company,
too," said Oatly CEO Toni Petersson.
The Oatly investment is the latest to come out of Blackstone's
growth business, which it launched in early 2019, hiring General
Atlantic veteran Jon Korngold to run it.
"There are very few brands out there that have this level of
scale globally and yet are still early in their consumer-brand life
cycle," said Blackstone's Ann Chung, who led the investment.
Blackstone is known for big buyouts of stable
cash-flow-generating companies, but investing in fast-growing
companies has been one of President Jonathan Gray's strategies for
navigating an expensive market. Last November, the firm struck a
deal to take a majority stake in MagicLab, the owner of dating app
Blackstone, which manages roughly $538 billion in assets, has
stuck to the theme despite recent market turmoil caused by the
coronavirus crisis. In March, it announced a deal to buy a majority
stake in health-care software company HealthEdge, and in April it
invested $2 billion in biotech company Alnylam Pharmaceuticals Inc.
Last month, it took a 49% stake in a venture that will own three
film-studio lots and five adjacent office buildings in Hollywood,
Blackstone is the latest high-profile investor to bet on the
growing demand for alternative foods. Earlier this year, Qatar
Investment Authority, a sovereign-wealth fund, led a $225 million
funding round in Califia Farms, a maker of plant-based food and
Write to Ben Dummett at email@example.com, Miriam Gottfried at
Miriam.Gottfried@wsj.com and Juliet Chung at
(END) Dow Jones Newswires
July 14, 2020 00:44 ET (04:44 GMT)
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