Canada’s Above Food to go public via SPAC

Chief executive Lionel Kambeitz says Above Foods will look to partner with large-scale regenerative operations developed in Saskatchewan, amid regional restrictions on institutional farmland investment.

Above Food has merged with Lexington Capital-backed Bite Acquisition in a SPAC deal that will bring the plant-based foods and ingredients provider to the New York Stock Exchange.

Saskatchewan, Canada-headquartered Above Food was founded in 2020 and describes itself as a vertically integrated regenerative ingredient company offering specialty ingredients and proprietary agricultural genetics, infrastructure and technology to a global distribution network. Most of its revenue comes from its “disruptive ag” platform, with specialty ingredients accounting for 37 percent and consumer packaged goods currently just 2 percent.

The SPAC deal will result in $44 million in proceeds for Above Foods, which has been assigned an enterprise value of $319 million and plans to list under the ticker ‘ABVE’ after the deal’s formal close later this year.  The company projects $482 million in revenue in the fiscal year ending in January 2024.

In January 2021, Above Food raised $40 million in a financing round led by Vancouver, British Columbia-headquartered investment bank Gravitas Securities. Above Food chair, president and chief executive Lionel Kambeitz told Agri Investor that BMO Capital Markets introduced the company to its strategic investors, Mexico City-headquartered Lexington and Mexican oat provider Grupo Vida later in 2021.

The group’s plans always focused, he said, on bringing Above Food onto public markets.

“We know that the old proteins are corn and wheat and soybeans. We know that the new proteins are canola on the oil side, and oats, lentils, chickpeas and quinoa and all of these new healthy crops,” said Kambeitz, who also serves as executive chairman of his family’s fifth-generation 70,000-acre farming operation in Canada, according to his LinkedIn profile. “We are very fortunate that the Northern Plains of the US and the prairie provinces of Canada are in northern latitudes and one of the best places in the world to grow these.”

Kambeitz said that regions of his native Canada are uniquely positioned to increase supply of key crops, in part because of regional regulations that restrict institutional investment in farmland. Above Food owns and operates a network of rail cars, storage and processing facilities it hopes to utilize in partnership with large-scale farming partners.

“It’s very common to have 75,000, 100,000 and 150,000-acre regenerative farms here in Southern Saskatchewan that have emerged under the umbrella of these proprietors, not under the umbrella of investment funds,” he said.

Above Food also includes a business unit housing six manufacturing platforms for consumer-packaged goods that supports nine of its own brands and more than 120 private label and branded SKUs.  Branded products offered by the company include a ‘simple meals’ platform, a group of dairy alternatives and a line of specialty grains and snacks.

Projections included within materials distributed in relation to the SPAC deal suggest Above Food expects CPG earnings to grow from an estimate of $4 million this year to $39.3 million in 2024.

“The explosion in private label by the largest retailers in the world is really very favorable to us,” Kambeitz said. “Those that have control of their supply chain from the beginning, those who control their ingredient processing, are the ones that have the competitive advantage on private label manufacturing for these largest retailers.”

The materials include comparisons between portions of Above Food and competitors that include specialty ingredients providers Benson Hill and Whole Earth Brands; commodity processors Ingredion and Green Plains and plant-based consumer product providers Oatly and Beyond Meat.