IPO Outlook: Blue Buffalo Brings Healthy Foods To Pets - Chipotle Mexican Grill (NYSE:CMG), Innovator Laddered Allocation Power Buffer ETF (BATS:BUFF)

Health conscious consumers are buying brands that focus on “food with integrity,” like Whole Foods market, Inc. WFM and Chipotle Mexican Grill, Inc. CMG.

This week, Blue Buffalo Pet Products BUFF will begin trading publicly as the pet-friendly food stock. After all, its motto is, “Love them like family. Feed them like family.”

Blue Buffalo blends all of its pet foods with natural ingredients and is the fastest growing pet food supplier in the United States. It’s estimated that the company only feeds approximately 2 to 3 percent of the 164 million pets around the country and controls 6 percent of the pet food industry market share.

Founded in 2002 by Bill Bishop and his two sons, Blue Buffalo began as a response to consumers’ interest in healthier foods for pets. The Bishop family was concerned with the quality of food and found a disconnect between what humans were feeding pets and what they thought they were feeding them.

The company started slow, by building a brand name to be synonymous with a love of pets and quality, nutritious ingredients. Today, people are becoming wise to what pets eat. In 2014, the company sold $918 million in pet food across 10,000 retail locations in the United States.

Financials

In 2002, the company started with the mission to provide healthy food for pets. It decided early on to invest heavily in its infrastructure to support future growth initiatives. From 2005 to 2009, sales were slow and company slowly lost money.

In 2010, it began expanding and saw sales grow at a 48 percent annual rate from $190 million to $918 million in 2014. Its bottom line is also expanding at a 25 percent annual rate, growing from $65.5 million in 2012 to $101.9 million in 2014.

As of March 2015, the company is well capitalized with a manageable debt load. It has $149 million of cash and $390 million of debt. Compared to net-income, its current interest expenses are around two percent.

Blue Buffalo expects to price the evening of July 21. It will be offering 29.5 million shares between $16 and $18 per share through JPMorgan and Citi.

Other Offerings This Week

Wednesday

Blue Buffalo Pet Products BUFF: Expects to price 29.5M shares between $16 and $18 through JPMorgan and Citi.

Thursday

Neos Therapeutics Inc NEOS: Expects to price 4 million shares between $14 and $16 through UBS, BMO and RBC.

Friday

ETRE REIT ESSF: Expects to price 11.5 million series A-1 shares at $15 through Sandler O’Neill & Partners, Evercore and Nomura.
Live Oak LOB: Expects to price 4 million shares between $16 and $18 through Sandler O’Neill, Keefe Bruyette and SunTrust Robinson Humphrey.

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