Kevin's Natural Foods weighs exit options

Kevin's Natural Foods, a Modesto, Calif.-based maker of sous-vide entrées, sides, sauces and seasoning blends, is weighing either an IPO or a sale, co-founder Kevin McCray told Axios at the ICR Conference.

Why it matters: The fast-growing food business' exit will be highly anticipated, given its size and because an uncertain economy draws investors toward consumer packaged goods companies.

By the numbers: Kevin's generated $140 million in revenue in 2022, growing 40% year over year.

• It projects that sales will grow to $190 million in 2023.
• In 2019, the company had only $8 million in revenue, which then grew to $45 million in 2020 and $100 million in 2021.

Catch up quick: In late 2021, Kevin's announced a minority investment by PE firms TowerBrook Capital Partners and NewRoad Capital Partners.

• That investment funded expanded production capacity to meet the company's growth trajectory until it reaches $500 million in revenue, a figure it projects it will hit by 2025.
• McCray says the company has a strong relationship with investment bank Wells Fargo, which advised it on the minority investment that provides Kevin's with the time to decide on the best exit strategy.
• He noted, however, that CEO Dan Costa, who hails from NewRoad, has sold a number of businesses (Tyson Foods has been a buyer).
• McCray tells Axios the company is attending conferences such as ICR's annual Orlando gathering to figure out the best path forward.

💭 Our thought bubble: Tyson would be among likely strategic bidders, along with and Hormel Foods, among others.

• Meat processors over the past decade-plus have pursued acquisitions to broaden their portfolios into higher margin branded pre-prepared foods.
• Tyson acquired Hillshire Brands in 2014 for nearly $8.6 billion while Hormel acquired Applegate Farms for $775 million in 2015, among their other buys in recent years.