WSJ Article Highlights How PE Creates Value
On Friday, The Wall Street Journal highlighted another example of private equity creating long term value for companies across America, profiling Annie’s Inc., which, with an injection of growth capital, management expertise and fresh thinking from private equity sponsor Solera Capital, LLC, experienced a “wildly successful” initial public offering two weeks ago.
Solera invested in the company in 2002, and since then has “helped the company grow from a niche brand sold in natural-food co-ops in New England to perhaps the year’s hottest non-tech initial public offering with a market capitalization of $682 million.” Aligning the firm’s investment focus on companies with a mission that goes beyond profitmaking, and staying true to companies’ brands are critical, according to Solera CEO Molly Ashby.
It’s proving to be a successful strategy. Annie’s revenues have grown from roughly $7 million in 1999 to $117.6 million at the March 31 close of the fiscal year. And priced at $19, Annie’s shares began trading at $31 and have risen steadily, closing at $41 on Thursday. James B. Lee Jr., vice chairman of J.P. Morgan who advised Solera on the Annie’s IPO, told The Wall Street Journal of Solera and Ms. Ashby, “I knew that if she could translate that into investing in the fields that she has chosen, she’d strike gold. Annie’s wasn’t an accident.”
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