LITTLE ROCK — Shares of Annie’s Inc., the maker of bunny-shaped crackers, surged Wednesday in its trading debut, after raising $95 million in an initial public offering that priced the shares above the range.
The stock soared 89 percent to close at $35.92.
The IPO price valued Annie’s at $316.3 million, or about 2.3 times sales in the 12 months through Dec. 31. That compared with an average of 1.6 for a basket of competitors that Annie’s lists in its filing, including Kraft Foods Inc. and Kellogg Co., according to data compiled by Bloomberg. Annie’s, whose products include macaroni and cheese and rabbit-shaped cheddar crackers, also competes with private companies Nature’s Path Foods Inc. and Amy’s Kitchen Inc.
While Annie’s may have priced its IPO too low, it was difficult to see the price jumping as much as it did during the first day of trading, said Ken Harris, chief executive officer of Kantar Retail Americas Consulting. The run-up in share price positions Annie’s for a secondary offering, Harris said.
“I don’t think you could have anticipated it,” Harris said. “They have a real knack for making healthy, good-tasting products. They will probably have a second round fairly quickly.”
Annie’s, based in Berkeley, Calif., follows more than 30 companies to go public in the U.S. this year, data compiled by Bloomberg show. Yelp Inc. has almost doubled since its IPO this month, while Caesars Entertainment Corp. had risen 44 percent through Tuesday since going public in February.
Co-founded in 1989 by Annie Withey and Andrew Martin, Annie’s plans to use some of the proceeds from the sale to repay debt. Withey, whose rabbit Bernie inspired the company’s bunny mascot, still writes the personal letters printed on the product boxes and “remains the inspiration and corporate conscience” for the company’s products, according to the website.
Annie’s had already raised the price range on the IPO, led by Credit Suisse Group AG and JPMorgan Chase & Co., once this week, from a range of $14 to $16. The stock is listed on the New York Stock Exchange under the symbol BNNY.
Revenue in the nine months that ended Dec. 31 surged 21 percent to $98.3 million from a year earlier, according to a regulatory filing. Under Chief Executive Officer John Foraker, Annie’s posted a profit of $6 million for the year ended March 31, 2010, after three years of losses. For the year that ended March 31, 2011, net income more than tripled to $20.2 million.
Private-equity firm Solera Capital LLC planned to reduce its stake to about 63 percent from 91 percent, according to earlier terms of the IPO prospectus. Annie’s planned to sell 950,000 shares in the offering, while existing shareholders planned to sell 4.05 million.
Business, Pages 22 on 03/29/2012