Annie’s Pop Boosts Solera’s Exit

Company: Annie’s Inc.

Offering: $95 million

Sponsor: Solera Capital LLC

Underwriters: Credit Suisse, JPMorgan

Solera Capital LLC earned a return of $77.3 million when portfolio company Annie’s Inc. went public Wednesday, as the New York buyout shop sold 4.4 million shares at $19.

Solera Capital, known for being founded by women in a business dominated by men, ended the day with a portfolio asset, 9.8 million remaining shares representing a 60 percent stake, worth $353.1 million, as Annie’s shares surged 89 percent to $35.92 on their first day of trading on the New York Stock Exchange.

Yesterday in the Solera Capital offices in mid-town, executives of the two organizations talked about the bunny that serves as the corporate icon of the Berkeley, Calif.-based organic pasta maker.

“It really symbolizes what we’re about in so many ways,” Molly F. Ashby, Solera Capital’s CEO, told Buyouts, citing the firm’s core values: diversity, respect, investing in next-generation businesses. “We’re committed to diversity. I think we’re the new mainstream.”

John M. Foraker, Annie’s chief executive officer, echoed the sentiment. “We’ve built an authentic brand diligently over 20 years”—socially responsible, environmentally sustainable, and geared toward the rising generation of families, he said. “By 2020 two-thirds of households will be headed by millennials. They want to do business with companies they trust to do the right thing even when they’re not looking.”

Which is not to completely discount the financial issues. Annie’s was a $7 million business when he started there in 1999, Foraker said, a pasta maker centered on a single main product, organic macaroni and cheese. “It was clear to me we could go other places.”

Seeking a financial and strategic partner, the company picked Solera Capital in 2002 and in 2003 it introduced Cheddar Bunnies, its first snack product. Today snacks are as big a part of Annie’s business as meals, Foraker said. Over the years, Annie’s extended its range of offerings and expanded through add-on acquisitions into additional markets, such as salad dressings, condiments and marinades. The company posted $117.6 million in sales in its fiscal 2011, which ended March 31, and Foraker said it is now rolling out a new product, an organic rising crust pizza, “our first foray into frozen.”

Even so, Annie’s is a company with a mission. “Business has a very important role in society that goes beyond making money,” Foraker said. “I don’t know if there are very many private equity funds that would have understood that and supported us over time.”

Solera Capital has invested in an eclectic assortment of companies from its decade-old $245 million debut fund, mostly consumer facing, from health care to publishing to fashion. “We pick forward looking spaces and sectors and we really build the companies out,” Ashby said. “That is core to our strategy.”

The firm has been rumored since last year to be planning to return to the market for a new fund, likely in the $400 million to $500 million range. Ashby would not comment about that.