After years of investor anticipation and guesswork, sources close to the situation told Reuters today Impossible Foods, the biggest dedicated U.S. plant-based meat maker after Beyond Meat (BYND 4.24%), is making plans for a near-future initial public offering (IPO). The anonymous tipsters told the news service Impossible intends to file for its launch on the public market sometime in the next 12 months.
The sources were unsure about whether Impossible Foods would choose to make its stock market debut through a traditional IPO, or if it will do so using a special purpose acquisition company (SPAC). SPACs are blank-check companies that go public, build investor interest, then merge with a privately held company, with the combined entity trading under a new ticker.
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SPACs were viewed as disreputable until very recently. Now, they're a major trend, with many IPOs occurring via SPAC mergers instead of direct listings. According to data reported by PYMNTS.com, 400 companies are currently seeking a matching SPAC, while the blank-check shell enterprises raised approximately $87 billion during 2021's first three months.
The sources say Impossible Foods is strongly interested in a SPAC IPO because this would likely put its valuation at $10 billion or higher. This represents explosive valuation growth. The company was valued at $2 billion in May 2020, then $4 billion after getting an additional $500 million from investors on Monday. The $10 billion valuation would increase this by 150%, but would also dilute share price more than a direct listing.
Demand for plant-based meat continues rising, as Beyond Meat's push for increased product selection in U.S. supermarkets and launch of full-scale production in China shows, making this a potentially opportune time for an Impossible IPO.
