How to IPO: US Foods SVP of Investor Relations Melissa Napier
8 December 2016
By Tiffany Regaudie
Back in May, food distribution company US Foods raised $1.02 billion through their IPO with shares priced at $23, landing them at the upper end of their target price of between $21-$24. At the time, it was the second-largest IPO for 2016.
We know that the IPO process is a stressful time for IROs, whose primary job is to tell the best corporate story possible to attract investors. While storytelling may seem straightforward, the logistics behind delivering an attractive and polished corporate story require months of precise planning, strategizing, and expertise. Great IROs handle the IPO process with a mix of big picture thinking and meticulous attention to detail, while ensuring they’re using the right tools to hand deliver a successful IR strategy to their management teams.
We caught up with Melissa Napier, SVP of investor relations at US Foods, who walked us through US Foods’ IPO like a pro.
In May 2016, food distribution company US Foods raised $1.02 billion through their IPO.
Q4: So first, congrats on the IPO! Let’s start on a positive note: what was the most rewarding part of the IPO process for you?
MN: When we rang the opening bell at the NYSE on our first day of trading – that was a very special experience. I also really enjoy interacting with investors, so I had a lot of fun on the road show. We were fortunate that things went pretty smoothly for us. Market conditions cooperated, we were oversubscribed for the deal book, and we priced at the high end of our range. I recognize that we were very lucky!
Q4: Before the day of your IPO pricing, what were some of your first to-do list items as an IRO?
MN: The first thing I did was choose a surveillance services firm – that’s really important for setting yourself up for success, with someone who is going to work alongside you once you’re public. I also spent some time finding a firm to design and host our IR website, so that we could really showcase our corporate story at the time of our IPO. I was also busy interviewing and choosing our Designated Market Maker on the NYSE, and planning launch day activities at the NYSE.
Q4: What were some of the biggest challenges you faced within your IPO process?
MN: Preparing for the IPO was a time intensive process, and it was definitely a challenge to balance everything that needs to get done. Drafting the S-1 is very important because the S-1 needs to tell your company story in a pretty clear and compelling manner, while also containing the appropriate legal and accounting language – always a tricky balance in communications! All material in the S-1 needed to be sourced, auditable, and documented; we did this via a virtual data room.
The roadshow is also an intense process. We visited eight cities in eight days, meeting with investors to tell our story. We took conference calls in transit between meetings. It’s extremely important to prepare your management team as much as you can ahead of time, because they won’t have much free time during a road show. You need to pay close attention to the tone of every meeting, to ensure consistency in messaging. It can be a real challenge to make sure that the fiftieth delivery of your message is just as effective as the first one. We spent a lot of time crafting our roadshow deck and practicing our roadshow delivery.
Q4: What were some of the lessons you learned from the process?
MN: First, start early. A successful IPO hinges on a good company story, regulatory clearance, and the right market conditions. You need to be prepared to move as soon as all three conditions align. You also need to refine your investment thesis, and it can take time to align on the exact words and phrases to make your story understood most effectively.
Second, stay organized. You’re responsible for flawless execution of the whole process, from start to finish. Find your support system, and use it to keep things moving quickly. Keep on top of logistics – you may need to get into the weeds sometimes. Make sure to build in enough prep time and down time for management.
Third, pre-record your IPO roadshow presentation – I’m glad we did. During your roadshow process, the roadshow deck is made public, along with management presenting the slides. Some companies record the roadshow presentation as part of sales force meetings with underwriter banks. We chose to record the presentation at our offices, in our kitchen, which made the presentation very personal to US Foods and also showcased our management team in a more professional light.
Q4: If you had to give one piece of advice to a peer who is taking their company public, what would it be?
MN: Start early and spend a lot of time crafting your elevator pitch. Telling your story in sound bites will be crucial to letting your audience know why you’re different from your peers. When you spend time on the basics of your story as early as possible, communicating that story throughout the IPO process is much easier. This is definitely a key to any successful IPO.
Melissa Napier is the SVP of investor relations for US Foods. From the corner diner to the five-star steakhouse, US Foods has helped shape how people eat in America for more than five generations. With a team of more than 25,000 people spanning 60 locations nationwide, they serve independent and multi-unit foodservice operations including healthcare, hospitality, government and educational institutions.