With $561.7 million raised, Westrock Coffee Holdings LLC of Little Rock tops Arkansas Business’ inaugural list of the largest private investment offerings ranked by total investment amount sold.
“The company sold $561 million in new equity funded by a contribution of equity from Westrock Coffee Co.’s existing owners and $220 million in new equity from investors,” including BBH Capital Partners of New York, Chris Pledger, Westrock’s chief financial officer, said via email to Arkansas Business. Westrock used the proceeds to purchase S&D Coffee & Tea from Cott Corp. in a transaction valued at $405 million, a deal that closed in February 2020.
The purchase created the nation’s leading combined coffee, tea and extract company serving retailers, restaurants and commercial accounts, according to a February 2020 Westrock news release.
The combined company employs 1,700 globally and is able to roast, grind and package more than 220 million pounds of coffee annually.
To compile the list, Arkansas Business used notices of exempt offering of securities that Arkansas companies filed with the U.S. Securities & Exchange Commission in 2020. These filings, known as Form Ds, are also reviewed by the Arkansas Securities Department. The issuer could be disqualified from filing if a felon is involved in the offering, but such an action would depend on when the felony happened and what it was for, said Aislinn Andrews, an ASD staff attorney.
“I think a lot of these issuers know that the states are looking for bad actors so they kind of pre-emptively do their own review into those possible disqualifications,” she said.
The list features a wide range of industries, from agriculture to real estate. The list is ranked by the amount of securities actually sold as of the most recent filing, and it also shows the total offering amount and the number of investors
But the documents don’t provide complete transparency. For example, Stephens Investment Partners 2020 LLC of Little Rock raised nearly $9 million, making it No. 12 on the list. But it reported no investors. Stephens Inc. spokesman Frank Thomas declined to comment on the LLC.
Other companies, however, offered more insight into their offerings.
The Cabana Black Fund LP of Fayetteville has two indefinite offerings on the list at Nos. 29 and 58. The hedge funds are affiliated with the Cabana Group of Fayetteville, which is the parent company of the one of the largest money managers in Arkansas, Cabana Asset Management.
Cabana Asset Management offers a variety of portfolios to clients in Arkansas and professional investment advisers around the country, said CEO Chadd Mason.
“We felt like there was a need to launch a product that’s based on our same philosophies of investing, and we wanted to make sure there was liquidity and transparency,” Mason said.
He said Cabana Asset Management started testing the hedge fund in the beginning of 2019 and operated it for about a year and a half before it was launched. “So we’re really just getting started with it, but I’m very excited about it,” Mason said.
Of the 90 offerings on this year’s list, 25 belong to LLCs related to AcreTrader of Fayetteville.
AcreTrader’s founder and CEO, Carter Malloy, told Arkansas Business in late 2019 that AcreTrader buys individual farms and places them in unique LLCs. “The investors then come on our website, and they can invest as little as $5,000 or $10,000 in a farm,” he told Arkansas Business. “It’s pretty simple. … You can do it literally in minutes online."
Nos. 82-90 on the list are offerings that hadn’t reported any sales; they are sorted by the size of the offering.
For example, Uniti Group Finance Inc. of Little Rock is a subsidiary of Unity Group Inc. of Little Rock, a spinoff from telecommunications firm Windstream Holdings Inc. Uniti Group Finance listed 126 investors but raised no money.
The offering was made to allow it to qualify as a real estate investment trust. That’s because every subsidiary has to have a certain number of shareholders, so “we issued that Form D to satisfy that requirement,” said Bill DiTullio, a Uniti Group spokesman.