Oatly eyes IPO at $15 to $17 a share

Celebrity-backed Swedish oat-milk maker Oatly Group AB prepared to price its initial public offering Wednesday amid another day of stock-market declines.

The company set its sights on raising between $1.27 billion and $1.43 billion by selling roughly 84.4 million shares at a price of $15 to $17 a share, according to a regulatory filing. At the midpoint, Oatly would fetch a valuation of roughly $10 billion.

Oatly's stock is expected to begin trading on the Nasdaq stock market Thursday under the symbol OTLY. Proceeds from the IPO will go to both the company and selling shareholders.

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Going public has proved tough for several companies recently, as the stock market has taken a turn lower on fears of inflation and investors have increasingly shied away from the types of growth companies that typically go public.

Last week, at least three companies postponed their IPOs due to volatility in the stock market. On Wednesday, website-development company Squarespace Inc.'s shares debuted on the New York Stock Exchange at a level far below their last financing round, then proceeded to fall further through the afternoon.

The S&P 500 ended Wednesday down 0.3%, recovering some of its losses from earlier in the trading session.

Oatly boasts famous investors including Oprah Winfrey and Natalie Portman, as well as private-equity giant Blackstone Group Inc. and lead investor Verlinvest. In July, Oatly announced a deal to sell a 10% stake to the group of celebrities and Blackstone for $200 million, valuing the company at $2 billion.

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Oat milk's popularity has soared recently. Its rise has been part of a shift among consumers toward more plant-based foods, similar to those produced by plant-based meat company Beyond Meat Inc.

Still, Oatly's losses have widened, according to regulatory filings. Its net loss in 2020 was $60.4 million, compared with $35.6 million the year prior. Revenues are growing significantly. In 2020, it more than doubled to $421.4 million from $204 million the year earlier.

One theme in the company's pitch is its environmental and social angle -- how consuming oat milk as compared to cow's milk results in less greenhouse gas emissions, less land usage and less energy consumption.

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In part because of this focus, the company was hoping it would attract interest from funds focused on environmental, social and governance, or ESG, issues, particularly those in Europe, where Oatly is based, according to people familiar with the matter.

"We established Oatly as an organization dedicated to improving the lives of individuals and the well-being of the planet through the push for a more sustainable food system," the company wrote in its IPO filing. "To address the global challenges we are all facing, delicious, healthy and sustainable plant-based food and drink must become a matter of course for everyone."