(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
NEW YORK (Reuters Breakingviews) - BBQGuys want to serve up the metaphorical spatulas and forks for the grill-making initial public offering mini-boom. The firm is merging here with special-purpose acquisition company Velocity Acquisition at an enterprise value of $839 million. It’s profitable here, but it’s also peripheral – and its valuation reflects that.
The e-commerce outfit, backed by former football star Peyton Manning and other family members, sells grills and smokers from brands like Weber and Traeger, both of which filed for IPOs this month. Demand for grills has soared during the Covid-19 pandemic, so BBQGuys’ revenue increased 68% in 2020. But it’s one of many places where backyard chefs can find such products. The company’s not just a bet on grilling habits, but on grilling connoisseurship, which makes it somewhat more speculative.
BBQGuys are going easy on the special sauce with their valuation. At 2 times next year’s estimated sales it’s cheaper than suppliers may fetch. Then again, it also lacks the additional simultaneous investment from big-name firms like BlackRock and Fidelity common to many other SPAC deals. That makes it look at best like a palatable side-dish. (By Amanda Gomez)
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BBQGuys go easy on the hot sauce - Reuters
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