Bakkavor, a ready meal supplier which serves Tesco, Marks & Spencer, Sainbury's and Waitrose, has set an early November date for its IPO which City A.M. revealed earlier this year could value it at up to £2bn.
Sources have since said that the listing might be more likely to value Bakkavor in the £1bn to £1.5bn range. The company, which holds the largest market share in the UK across ready meals, salads, desserts and pizza and bread, plans to raise £100m through issuing new shares.
Founders Agust and Lydur Gudmundsson, who currently own 59 per cent of Bakkavor, and hedge fund Baupost, which owns 41 per cent, will also sell down part of their stakes. They intend that Bakkavor will have a free float of around 25 per cent following the IPO.
“This IPO will enable us to continue to invest to ensure we create value for all investors and stakeholders, and bring more great tasting food to our customers,” said Agust Gudmundsson, who is also chief executive.
The food company will use part of the proceeds to reduce its debt, while Baupost will be able to return some capital to investors.
In the first half of this year, Bakkavor – which is the UK's largest supplier of hummus – generated revenue of £903.3m and earnings before deductions of £77.7m. Both of these delivered growth on the same period a year previously.