Oatly could be valued at $10bn through market listing

The Swedish maker of plant-based dairy substitutes expects to raise about $1.65bn through initial public offering

A pint of Oatly brand ice cream is arranged for a photograph in the Brooklyn borough of New York, U.S., on Wednesday, Sept. 16, 2020. Oatly AB is considering an initial public offering that could value the Swedish maker of vegan food and drink products at as much as $5 billion, according to people with knowledge of the matter. Photographer: Gabby Jones/Bloomberg via Getty Images

Oatly Group expects to raise as much as $1.65 billion for itself and its investors in an initial public offering, potentially giving the maker of plant-based food and drink products a total valuation of over $10bn.

The Swedish company is offering 64.7 million American depositary shares and expects an IPO price of $15 to $17 per ADS, with net proceeds to the company of $976.6 million at the middle of that range, according to an amended regulatory filing on Tuesday. The document adds details to Oatly's original IPO filing last month.

Scottish asset management firm Baillie Gifford has indicated interest in buying as much as $500 million of the ADSs in the offering, Oatly said.

Oatly was started by brothers Rickard and Bjorn Oste. Using technology based on research from Sweden’s Lund University, the company turns fibre-rich oats into liquid food.

Oat milk, which was essentially non-existent in the US before Oatly’s entrance, saw a 151 per cent jump in sales in dollar terms at retail outlets during the 52-week period ended March 13, according to NielsenIQ. The plant-based dairy category as a whole rose 20 per cent during the same period. By sales, oat milk is the second-most popular option after almond milk.

In July, Oatly secured $200m in new capital from investors led by Blackstone Group. The group also included celebrities such as Oprah Winfrey and Jay-Z, as well as Starbucks founder Howard Schultz. The company was valued at about $2bn in the round.

Oatly said on Tuesday that it would use $188.3m of the IPO proceeds to repay a “sustainability linked loan” agreement with a host of European banks, $10.8m for a portion of its bridge financing, and the rest for working capital to fund growth.

Oatly chief executive Toni Petersson’s stake in the company would be worth $137.7m at the $16 mid-point of the IPO range, according to the filing, and chief financial officer Christian Hanke’s shares would be valued at $13.4m.

Morgan Stanley, JPMorgan Chase and Credit Suisse are leading the offering. Oatly plans to list its shares on the Nasdaq Global Select Market under the symbol OTLY.

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