Hogan Lovells Represents Laird Superfood in Private Financing Round and IPO

Plant-based food startup surfs soaring stock market to $62 million public offering

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 Attorneys from Hogan Lovells’ Denver office represented Laird Superfood in a duo of deals culminating in a Q3 IPO that netted the Oregon-based snack and beverage startup more than $62 million.

Laird Superfood, which shares a name with co-founder and famed surfer Laird Hamilton, made waves on Wall Street when it nearly doubled its IPO price during its first day of trading on Sept. 23. At the time of the IPO, the plant-based food company’s products included coffee creamers, hydration supplements, coffee, tea and hot chocolate, and it has since launched a line of packaged pili nuts. 

Hogan Lovells has been representing five-year-old Laird Superfood since 2018 and, according to partner David Crandall, the company was eyeing an IPO as early as that year. While it held off on going public, the company later raised $32 million in an investment round led by WeWork. Hogan Lovells guided Laird Superfood though that deal and also helped the young company navigate WeWork’s exit as an investor in late 2019 “on pretty favorable terms for Laird Superfood,” Crandall said, after the coworking company’s own IPO failed to launch.

“And then this year, the IPO market has been very, very good,” Crandall said. “Laird Superfood said let’s go ahead and give it a go again.” 

Before the company went public, it raised $10 million in a crossover round funded by Danone Manifesto Ventures, the corporate venture arm of French food conglomerate Danone. The pre-IPO private placement closed in April.

“The trend in IPOs recently…  is you’ll have large institutional investors putting money into a company that plans to go public,” Crandall said. “Basically, this acts as a seal of approval for other investors to see that smart money like Danone has taken a look at the company and found it a good investment opportunity.”

The deal reunited Crandall with one of his former associates, Andrew McCormick, who is now general counsel at Laird Superfood. McCormick said he was one of about 35 employees when he joined the company a few years ago, and it has since grown to around 120 employees. “At this point, we’re the largest employer in Sisters, Oregon, after the school district,” he added.

Going public has “kind of always been the plan,” McCormick said. “The company is really full of people who believe in the public markets model in a big way.” As the company was starting to “get serious” about its IPO, McCormick said, COVID hit U.S. shores. But when equity markets bounced back after the initial shock from COVID and “deals were getting done,” he said, “the window was open for us. So we went for it.”

Despite the pandemic, major stock market indices have hit all-time highs following a crash in March, and the IPO market has been especially hot. Earlier this month, Barron’s reported that the number of companies with IPOs in the first 10 months of 2020 was nearly twice that of the same period in 2019. But while COVID hasn’t stopped companies from making their stock market debut, it has changed the process for businesses and investors. 

“The IPO process is meeting a lot of investors and really getting the story out there,” Crandall said. “Oftentimes, a management team will spend two weeks on the road and meet investors from California to the Northeast and sometimes Toronto and London as well. And that entire process has changed with COVID.”

IPO roadshows that used to require a couple of weeks and thousands of miles of air travel, Crandall said, are now being done in a matter of days over Zoom. Crandall added that while he expects some investors will still want to meet in person after the pandemic, “it wouldn’t surprise me to see some of the efficiencies that have been gained during COVID continue on afterwards.”

Laird Superfood’s IPO did end in a trip to New York, McCormick said. But instead of gathering around a conference table together, he said, everyone talked over Zoom and traded documents from separate rooms in the same hotel during the last stages of the deal. 

“The deal got done and then the day came, and you go down to the New York Stock Exchange and everybody’s wearing their masks,” McCormick said. “And you have this really glamorous old building more or less to yourself.”

Crandall and McCormick both said working with Laird Superfood’s leadership, including Hamilton and his wife, volleyball player Gabrielle Reece, who serves as the company’s chief brand ambassador, has been a rewarding perk of their jobs.

“They’re very focused on maintaining an authentic company that’s trying to deliver these healthful products and avoid selling out or trying to become something that’s bigger through lower quality,” Crandall said.  “It’s fun seeing a company that is concentrating on not only expanding its margins and its markets but also really ‘changing the world,’ is what they kept saying.”

The health food company is not the only Hogan Lovells client that has taken advantage of surging stock prices. “We’ve seen a huge uptake in equity offerings by companies,” Crandall said. “Just since the beginning of July, we’ve done nine out of this office alone, which is the fastest pace that I’ve seen, I think, ever.”

“The market valuations have prompted companies to make hay while the sun’s shining,” he said. “And also the uncertainty — a lot of these companies don’t know what the long-term effect of COVID is going to be, and the opportunity to raise capital while their stock prices are up has been really a blessing.”

—Jessica Folker

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