July 24, 2015 / 5:40 PM / 4 years ago

Exclusive: Atkins Nutritionals heads for IPO

(Reuters) - Atkins Nutritionals Inc plans to pursue an initial public offering after an effort to sell the U.S. maker of protein bars, shakes and frozen meals did not meet its price expectations, according to people familiar with the matter.

The decision underscores a turnaround that began after Atkins filed for bankruptcy about 10 years ago. With new products and marketing, it has sought to shift consumers’ perception of its high-protein eponymous diet, which was previously seen as unhealthy and bacon-fueled.

Atkins’ private equity owner, Roark Capital Management LLC, is now seeking a valuation of roughly $1 billion, including debt, for the company, the sources said this week.

Roark believes stock market investors could value Atkins higher than other companies and buyout firms, the sources added.

An IPO in New York could come later this year, according to the sources, who requested anonymity because the deliberations are confidential.

Atkins and Roark did not respond to requests for comment.

The Denver-based company has changed ownership four times since the death in 2003 of founder Robert Atkins, who pioneered the famous diet. Roark acquired Atkins in 2010 for $301 million from private equity firm North Castle Partners LLC.

Roark hired investment banks Centerview Partners Holdings LP and Deutsche Bank AG (DBKGn.DE) earlier this year to explore a sale, sources said at the time.

In the most recent auction for Atkins, potential buyers had concerns about its checkered past and harbored doubts over whether the company would fit in their portfolio, some of the sources said.

Nevertheless, Atkins is not the first private equity-owned snack company to have snubbed an outright sale in favor of an IPO. Twinkies maker Hostess Brands LLC pulled itself from the auction block earlier this month because it believed it could command a higher valuation in an IPO, people familiar with the matter previously told Reuters.

Some larger companies have recently shed their dietary products. In the last three years, Unilever NV (UNc.AS) sold Slim-Fast, and Nestle SA NESN.VX sold Jenny Craig, both to private equity firms.

Reporting by Lauren Hirsch in New York; Editing by Lisa Von Ahn

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