Reynolds Consumer Products Inc., the maker of Reynolds Wrap aluminum foil and Hefty trash bags, rose in its trading debut after raising $1.23 billion in the biggest initial public offering by a household goods maker.
The company’s shares rose Friday as much as…
5.8% from the $26 offer price. They were up 4.4% to $27.14 at 10:39 a.m., giving the company a market value of $5.5 billion.
Reynolds, backed by New Zealand billionaire Graeme Hart’s Rank Group, sold 47.17 million shares Thursday after marketing them for $25 to $28.
The offering is the first billion-dollar U.S. listing of the year, as well as an unusual debut for a household goods maker. The listing is the largest ever by a company in that niche, topping the 2014 Brussels listing by soap maker Ontex Group NV’s 2014 that raised 596 million euros ($659 million) including the so-called greenshoe shares, according to data compiled by Bloomberg.
The Reynolds listing is the biggest test so far this year of investor interest. Also on Thursday, 1Life Healthcare Inc., a provider of tech-driven primary care clinics under the One Medical brand, priced shares at the bottom of a marketed range to raise $245 million.
Next week, drug and biotech research services provider PPD Inc. is seeking to raise as much as $1.62 billion in its IPO. Casper Sleep Inc., one of the leading brands in the so-called bed-in-a-box industry, also plans to go public, with a goal of raising $159 million.
The offerings follow last year’s tech-related IPO surge, led by Uber Technologies Inc.’s $8.1 billion offering, that gave way to a largely disappointing second half.
Peloton Interactive Inc. dropped in its trading debut in September, the same month as WeWork’s share-sale plans were officially withdrawn after its spectacular flop. In November, Canadian waste management firm GFL Environmental Inc. canceled an IPO that targeted as much as $2.1 billion.
Reynolds, based in Lake Forest, Illinois, was formed by Rank Group in 2010, primarily through a consolidation of the earlier Reynolds and Hefty businesses with Presto brands. Unlike many of the so-called unicorns that went public last year, Reynolds is profitable. For the nine months ended Sept. 30, it had net income of $135 million on revenue of $2.1 billion, according to its filings.
The company’s products are used in 95% of U.S. households, according to its filings. Hefty trash bags and related wares accounted for about 39% of its sales in 2018, followed closely by cookware goods including Reynolds foil, which was first sold in 1947 and has 64% of the U.S. market share. Hefty tableware, including disposable cups and cutlery, made up the remaining 24% of revenue.
Reynolds said it plans to grow through…
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