Annie's increased the amount it hopes to raise for its initial public offering and also plans to increase the per-share price for the proposed $85 million IPO that's due to launch this week, regulatory filings Monday by the Berkeley-based company showed.
The producer of natural and organic foods is expected by underwriters to begin trading its shares Wednesday.
"Annie's is a company that has broken through being a narrowly focused natural health foods company into one that is in the mainstream of retail," said Linda Killian, a principal executive with Connecticut-based Renaissance Capital, an investment firm specializing in IPOs.
The food company's fare can now be found in big supermarkets such as Safeway and Kroeger, and in general merchandise titans such as Wal-Mart and Target.
Annie's intends to sell its shares at a price ranging from $16 to $18 each. It previously had planned to sell shares at $14 to $16 each. At the new proposed midpoint for the IPO price, the offering would raise $85 million. Annie's intends to sell 5 million shares in the IPO.
"When you see the price range getting pushed higher a few days before the shares trade, that is a very good sign for the stock," said David Menlow, president of New Jersey-based IPOfinancial.com. "The underwriters are sending a firm signal that the stock is oversubscribed."
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"You won't get something that will be an exponential growth curve," Menlow said.
Annie's was founded in 1989 by Annie Withey and Andrew Martin as Annie's Homegrown.
The company's motto is "Eat Responsibly -- Act Responsibly."
Initially, Annie's focused on providing healthy macaroni and cheese meals.
Now it has more than 125 products in multiple categories, including meals, snacks, dressings and condiments.
The company's most iconic symbol is a mascot known as Bernie, "The Rabbit of Approval." BNNY is slated to be the ticker symbol for the shares when they begin trading.
During the company's 2011 fiscal year that ended last March, Annie's earned $20.2 million on sales of $117.6 million.
Over the nine months that ended in December, it earned $7.7 million on sales of $98.3 million, SEC documents show.
Despite the hopeful signs for the IPO, Annie's pointed out an array of risks that could jolt the company.
"Consumers may reduce the amount of natural and organic products that they purchase where there are conventional offerings, which generally have lower retail prices," Annie's management stated in IPO papers. "Consumers may choose to purchase private label products rather than branded products because they are generally less expensive."
Also, tough times could prompt distributors and retailers to slash inventories.
"During the economic downturn from 2007 through 2009, distributors and retailers significantly reduced their inventories, and inventory levels have not returned to, and are not expected to return to, pre-downturn levels," Annie's stated.
Despite the uncertainties, Annie's said it will remain true to its core values.
"Authentic brands are brands that win," Annie's said. "We strive to operate in an honest, socially responsible and environmentally sustainable manner because it is the right thing to do and it is good for business."
Contact George Avalos at 925-977-8477. Follow him at Twitter.com/george_avalos.
Annie's is planning an initial public offering this week that would raise $85 million and price the shares at $17. Here are a few facts about the company.
Business: Natural and organic foods
CEO: John Foraker
Revenue in fiscal 2011: $117.6 million
Profit in fiscal 2011: $20.2 million
Proposed ticker: BNNY
Source: Mercury News reporting