Freshpet execs plan new $345M SPAC after petfood giant gains 900%+ since IPO

Mar. 15, 2021 2:17 PM ETFreshpet, Inc. (FRPT)FRPTBy: Jerry Kronenberg, SA News Editor1 Comment
  • Two executives who took Freshpet (NASDAQ:FRPT) from a start-up to an IPO that’s gained 934% in six years are teaming up with ex-Carlyle Group and Bank of America dealmakers to raise up to $345M for a new SPAC.
  • Freshpet Chairman Charles Norris and Daryl Brewster, who backed Freshpet prior to its November 2014 IPO, have filed paperwork for an initial public offering for Transformational CPG Acquisition Corp. (TCPGU).
  • The new special purpose acquisition company will focus on consumer-packaged goods. Norris will serve as the SPAC’s chairman, while Brewster will be the new SPAC’s CEO.
  • Although Freshpet was trading 0.4% lower at $155.10 shortly after 2 p.m. ET Monday, the stock has risen more than 900% since going public at $15 a share.
  • In fact, FPRT has gained more than 280% in the past year alone after hitting a $40.79 intraday pandemic low last March 18.
  • Norris has not only steered Freshpet, but had a long CPG career prior to joining the petfood company. For example, he served as president of bottled-water firm McKesson Water Products Co. until its $1.1B sale to Danone S.A. in 2000.
  • Before that, Norris worked as president of Deer Park Spring Water Co. and had a seven-year run at Nestle.
  • As for Brewster, he helped back Freshpet pre-IPO while serving as operating adviser to private-equity firm MidOcean Partners.
  • Prior to that, Brewster worked as Krispy Kreme Doughnuts’ CEO after a 10-year run as a Kraft Foods president. Brewster also previously served as managing director of U.K. operation at Campbell Soup Co.
  • The CPG veterans are teaming up on the new SPAC with Nadim Barakat and Wadih “Woody” Boueiz, co-founders and co-CEOs of private-equity firm Transformational Capital Partners LLC.
  • Barakat formerly served as a Carlyle Group managing director, while Boueiz was previously a Bank of America Merrill Lynch managing director.
  • Plans call for TCPGU to sell 30M investment units at $10 apiece, with each consisting of one Class A share and 0.33 warrants entitling the holder to buy a second share at $11.50 in the future.
  • The SPAC is also granting underwriters the option to buy as many as 4.5M additional units for overallotments, potentially raising another $45M.
  • Additionally, the SPAC’s sponsor intends to invest $8.1M for 5.4M warrants priced at $1.50 apiece, with each entitling the sponsor to buy one Class A share at $11.50 in the future. That investment will rise to $9M for 6M warrants if underwriters exercise all overallotment options.
  • Executives wrote in an S-1 filing with the U.S. Securities and Exchange Commission that they intend to seek an acquisition target worth $1.25B or more.
  • “While we may pursue an acquisition opportunity in any industry, we intend to focus on consumer businesses, [including] packaged food, beverage, beauty and personal care [or] consumer durables and vitamins, minerals and supplements,” the executives wrote.
  • They added that “we will consider businesses that are already benefiting from current consumer trends such as digitalization, direct-to-consumer, health and wellness and sustainability, as well as businesses with the potential to evolve in order to embrace these trends.”
  • The new SPAC intends to list its units on the Nasdaq under the ticker “TCPGU.” Shares and warrants will also later trade separately as TCPG” and “TCPGW,” respectively.

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