Westrock Coffee (NASDAQ:WEST) is in the spotlight as the company gets ready to commence trading on the Nasdaq today. Trading of WEST stock follows Westrock’s successful special purpose acquisition company (SPAC) combination with Riverview Acquisition. That transaction raised $300 million of equity capital and provides access to $350 million of debt capital.
Westrock will be led by CEO and co-founder Scott Ford. Meanwhile, Riverview CEO R. Brad Martin will join the company’s board of directors. Ford said the following about the new listing:
“Accessing the public markets is not only validation of the efforts of our incredible team but will also enable us to expedite our growth in the U.S. and internationally, while capitalizing on the generational shifts in consumer preferences. I am confident in Westrock Coffee’s future and proud of the team that has led us to this important moment.”
According to the company, Westrock provides 20 million cups of coffee across the globe every day. The company has offices in 10 countries and sources its coffee and tea products from some 35 countries. It is also the “largest custom, private label coffee and tea provider” to U.S. restaurants by volume.
WEST Stock Begins Trading on the Nasdaq Exchange
During the second quarter, Westrock’s net sales came in at $223.4 million, up 31% year-over-year (YOY). Sales growth was driven by a 57% increase in single serve pods sales and a “20% increase in flavors, extracts and ingredients volumes.” The net loss for Q2 totaled $5.8 million compared to a loss of $6.1 million a year ago. Still, a growing trend of profitability seems to be present. On top of that, adjusted earnings before interest, taxes, deductions and amortizations (EBITDA) tallied in at $13.3 million, up 19% YOY.
Ford admitted that Westrock dealt with inflationary pressures during the quarter. However, the CEO also quipped that the company is “very well-positioned” to deal with vendor product demand in both the short and long term.
For the full year, revenue guidance has been set at $960 million. Adjusted EBITDA is expected to be $75 million for the year as well.
The SPAC merger is expected to value Westrock at an enterprise value of $1.086 billion, with each share at $10. In addition, the company will have roughly $120 million of cash on hand if Riverview shareholders do not redeem their stake. Meanwhile, Westrock’s existing shareholders are “rolling 100% of their shares into the combined company.”
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
