Flow Alkaline Spring Water will go public this spring on the Toronto Stock Exchange (TSX) as the Toronto-based beverage company plans a reverse merger with an initial public offering (IPO) that aims to raise $50 million.
The announcement comes as the six-year-old brand seeks to double its U.S. footprint over the next 18 months. According to Flow founder and CEO Nicholas Reichenbach, the company expects to begin trading in April or May and is planning a secondary offering on NASDAQ within the next 12 months.
Reichenbach said the company was inspired to take the public route after Beyond Meat’s 2019 IPO showed an avenue for better-for-you food and beverage companies on the stock market. He noted that Flow’s focus on environmental sustainability (the drinks are packaged in Tetra-Pak containers) positions it as a high-growth, better-for-you brand.
“[Beyond Meat was] when you started to see healthy institutional capital come into the market with a 10 to 15 year hold,” Reichenbach said. “And what that does is it gives a really good platform for companies like Flow to really access institutional growth capital that has a mid to long term view on the company’s growth, which really gives the runway for us to take a incredible leap forward as a company.”
By going public, Reichenbach said Flow could potentially achieve a 5-to-7.5x investment multiple, versus a 1.5-3.5x multiple through a more common private equity-to-exit strategy. The move will also allow him to stay on as CEO for the foreseeable future, he added.
“I intend to stay till the very end,” he said. “I think we can take this all the way. It’s a very rare thing in this industry — it’s a unicorn for sure — where you can take a company and have a long term 10-20 year vision on it. And that’s what going public is to me as an entrepreneur.”
Flow is currently available in over 30,000 doors in the U.S. and Canada, with much of its sales coming in the natural and specialty channels. Points of distribution have increased roughly 75% over the last three months. Earlier this month, Flow chief revenue officer Tim Dwyer told BevNET that the company aims to have 65% ACV in the grocery channel by next year. The company grew sales 44% last year to over $25 million and ecommerce sales increased over 200% to represent over 20% of Flow’s total sales.
According to Reichebach, Flow owns over $100 million in assets, including two artesian springs — one in Canada and another in Virginia. Through those facilities, the company also operates its subsidiary Planet A Co-Packing Solutions which produces products for companies including Vita Coco and Orro among others. Reichenbach said that Flow expects to produce over 100 million units this year.
Last year, Flow raised $45 million in a Series D funding round that included backing from celebrity investors including rapper Post Malone, Shawn Mendes and MLB champion Chase Utley. Reichenbach noted that Flow’s influencer roster has helped grow its consumer base to over 17 million and the company expects to double that this year.
Earlier this month, Flow announced a new Vitamin-Infused Water line, as well as new flavors for its collagen-infused line, representing a broader expansion into the functional beverage space.
“We can take this company to a multi-billion-dollar revenue stream,” Reichenbach said. “When you look within the premium enhanced water category globally, it’s growing at double digits every year. So from a category perspective, we could sit in this path for years as we capture market share and grow to be the number one premium enhanced mineral water in North America.”