Canada: Flow Water to go public
The premium water brand prepares to merge with RG One Corp. and enter the Toronto Stock Exchange
Flow Water and RG One Corp. have signed a letter of intent to complete a going-public transaction by way of a business combination and carry on as Flow. The companies anticipate the transaction will be completed sometime in the first half of this year.
The celebrity-backed, premium water brand is looking to raise a minimum of C$65 million, of which C$30 million has been committed from existing shareholders as part of a non-brokered financing.
Based in Toronto with operations in Canada and the US, Flow produces packaged alkaline spring waters sold in Tetra-Pak cartons made from renewable-resourced material that are fully recyclable.
More than 35 celebrity investors are backing the company, including Post Malone and Shawn Mendes. The brand has raised more than $100 million in funding, including $45 million raised in its Series D announced in May. Private equity firm Virgo is among the latest investors.
Go-public plans
Nicholas Reichenbach, founder and chief executive of Flow, revealed the company is ready to pursue a listing on the Toronto Stock Exchange.
For Reichenbach, the C$30 million committed capital along with its entrance to the public market will accelerate growth through expansion of omnichannel retail distribution and continued product innovation.
Flow is aggressively targeting the large and rapidly growing premium enhanced water and ‘better-for-you’ beverage markets.
The product line comprises premium alkaline mineral spring water, organic flavoured waters, collagen-infused spring water, and organic-certified vitamin spring water infusions.
Reichenbach founded Flow with a vision and purpose to inspire the wellness of the world with the power of water. “In 2015, I saw an opportunity to utilise the abundant, beautiful water from my family’s artesian spring in South Bruce County, Ontario, and inspire change toward more mindful consumption,” he said.
Market demand
To meet market demand, Flow now has two vertically integrated manufacturing facilities in key North American markets that can reach customers wherever they are.
Reichenbach said: “Our goal is to become the number-one wellness beverage brand in the world, and we have a clear path and highly skilled team to achieve this. We’ve demonstrated consistent quarter-over-quarter growth, grew revenue to approximately C$30 million in 2020, and are over 95% CAGR since 2018.”
The company is launching a 2021 spring and summer campaign featuring a host of celebrity investors, including Shawn Mendes, NBA superstar Russell Westbrook, and Taboo from the Black Eyed Peas.
The campaign aims to drive mass awareness of Flow’s mission and vision and inspire the Flow movement across social media and marketing platforms and reach consumers on all channels.
Flow has established direct sales relationships with most of the largest grocery, drug stores, and convenience chains in North America – products are sold at 30,000 chains in the US and Canada. E-commerce sales make up about 20% of overall revenue, 65% of which come from subscriptions.
The company announced plans to add Core-Mark in Canada to service new listings in gas and convenience chains nationwide.
Flow has engaged Stifel GMP, a subsidiary of Stifel Financial, to act as lead agent and book runner, as well as a syndicate of investment banks in connection with the subscription receipt financing.
