Annie’s IPO To Boost Solera’s New Fund

Target: Annie’s Inc.

Sponsor: Solera Capital LLC

Underwriters: Credit Suisse, J.P. Morgan

Solera Capital LLC, the pioneering female-led buyout shop, could receive a boost in its plans to raise a new fund by taking public one of its oldest holdings, the organic food marketer Annie’s Inc.

The Berkeley, Calif.-based company is 90.5 percent-owned by Solera, which made its first investment in August 2002 in a company known then Annie’s Homegrown. The firm made a series of add-on acquisitions, mostly complete by 2005, and the firm has grown to offer more than 125 products in more than 25,000 retail locations in the United States and Canada.

“They have worked really hard to get this where it is,” said a person familiar with the firm, who asked not to be identified for not being authorized to speak.

Annie’s filed SEC documents for its IPO on Dec. 1, but the paperwork mostly left blank spaces where the financial details of the offering are to be inserted in future amendments. The Wall Street Journal said the offering could be as much as $100 million, and the financial blog Seeking Alpha said Solera probably would continue to own 50 percent or more of Annie’s after it goes public.

In the past five years, Annie’s sales have nearly doubled to $117.6 million in fiscal 2011 from $65.6 million in fiscal 2007, for a compound annual growth rate of 15.7 percent, according to the filing, and in just the past three years, profit has grown to $20.2 million in the fiscal year ended March 31, compared to a loss of $973,000 in fiscal 2009. In the same period, net sales have grown 26 percent to $117.6 million.

A strong exit would provide a boost to Solera as it returns to the fundraising market after a decade-long absence. Founded in 1999 by Molly Ashby, a former J.P. Morgan investment banker, the firm raised its inaugural, the $245 million Solera Partners LP fund, with commitments from the Los Angeles County Employee Retirement Association, the Oregon Public Employees Retirement System and the New York City Comptroller’s Office, according to the Thomson One private equity database.

A former managing partner, Karen Gordon Mills, was appointed by President Barack Obama in 2009 to be director of the Small Business Administration.

The planned second fund, likely to target $400 million to $500 million, had been anticipated to begin marketing by the end of 2011, Buyouts reported in August. Today, it appears marketing will not begin until later in 2012, and even the size of the new pool remains undetermined, said the person with knowledge of the firm.

Some investors had urged Ashby to cash out on Annie’s earlier, to take the profit on the exit and move on, but Ashby believed the payoff could be greater by bringing the company to a further stage of development, said the person. “She stuck to her guns. That’s the Molly Ashby way.”