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Egg Producer Vital Farms Raise $200 Million in IPO
USAgNet - 08/11/2020

As investors rushed to pick up shares of Vital Farms just a few minutes after it started trading on Friday afternoon, founder Matt O'Hayer took a moment to share what he's learned about scaling his pasture-raised egg company from 20 hens to an IPO.

"Always be over-capitalized," O'Hayer said during a live interview on Instagram with Forbes.

Friday's public offering did exactly that, filling Vital's coffers with $200 million and giving it a market cap of $1.3 billion at the close. Just two years ago, when Forbes profiled O'Hayer in 2018, Vital Farms had raised $25 million in all, at a valuation Pitchbook estimated at $136 million.

Now the largest pasture-raised egg brand in the U.S.-and one of food industry's most anticipated IPOs-Vital Farms delivered: Its shares soared 60%, closing at $35. Even before its public debut, it had to boost its opening stock price, initially planned between $15 to $17, to $22.

Forbes reports that the company's success proves that more ethical standards, like paying farmers and plant workers at a premium and not using futures contracts to hedge on prices are appealing to consumers-and investors.

Vital Farms' line of products, including butter, ghee and hard-boiled eggs, brought in $140 million in sales last year, with distribution in 13,000 grocery stores from Kroger KR +0.6% to Whole Foods WFM 0.0%. Its network of family farmers now top more than 200.

"We wanted to produce food from small family farms at scale," O'Hayer said on Friday from the Midtown Manhattan offices of Morgan Stanley MS +1.8%. "There doesn't have to be a tradeoff with being a profitable company and focusing on your stakeholders. We treat the hens like the sentient beings they actually are, not egg-laying machines."

Vital's net income margin last year was 2.3%, almost double that of Cal-Maine CALM +3.6%, the only other publicly traded egg company, which sells the brands Egg-Land's Best, Land O' Lakes and Farmhouse.

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