Avocados are displayed at a produce market on April 02, 2019 in San Francisco, California.
Justin Sullivan/Getty ImagesWith so much attention on large technology IPOs, one company is going public with a much different offering. Mission Produce, known for its dark green Hass avocados, is slated to make its market debut Thursday.
The Oxnard, California company, which is a leading distributor, grower and packer of fresh Hass avocados, could raise as much as $159.4 million when it prices its deal later Wednesday. Mission is offering 9.375 million shares at $15 to $17 each. Underwriters on the deal include BofA Securities, JPMorgan Chase, and Citigroup.
While large tech offerings have dominated new listings recently, Mission is riding a more flavorful type of popularity. Hass is the most beloved avocado in the U.S., representing 95% of consumed avocados, a prospectus filing said. Hass avocados are fruits with bumpy, dark green skin that turns nearly black when ripe. More than half, or 60%, of millennials in 2018 purchase avocados, according to the Hass Avocado Board.
Unlike many tech startups, Mission is profitable. Income, however, has fallen 79% to $10 million for the nine months ended July 31 from $47.8 million for the same period in 2019. Revenue was flat at $655.5 million.
While the Hass may be trendy, Mission has struggled during the Covid-19 pandemic. The virus began impacting Mission’s operations starting in March, resulting in canceled orders and changed customer buying patterns, the filing said. The biggest impact was to Mission’s food service customer base, which includes restaurants. The pandemic forced thousands of restaurants across the U.S. to close.
Mission gets most of its avocados from Mexico, a prospectus said. Its 10 biggest customers account for 63% of sales. Kroger (Ticker: KR) is Mission’s biggest client, representing about 12% of total sales. Other customers include Walmart (WMT), Costco Wholesale (COST), Aldi, Loblaws and Chipotle Mexican Grill (CMG).
The company employs roughly 3,125 people, with most, or 2,127, at its plant in Peru. Mission also uses many seasonal workers at its farms and facilities in Peru, a prospectus said.
Luis Gonzalez, a director, sold his company, Grupo Arato, to Mission in 2018, the SEC filing said. Gonzalez will have the largest stake, 16.3%, in Mission after the IPO. Bruce Taylor, a director, will have 13.8%, while CEO Stephen Barnard, who co-founded Mission Produce in 1983 will own 8.7%.
Write to Luisa Beltran at luisa.beltran@dowjones.com
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Mission Produce Hass Avocado IPO Set for October 1 - Barron's
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