(Reuters) — Shares of Blue Buffalo Pet Products Inc rose as much as 36 percent in their debut, valuing the owner of pet-food brands such as Blue Basics and Blue Wilderness at $5.34 billion.
The company’s initial public offering raised $676.6 million, after its shares were sold at $20 apiece, well above the expected price range of $16-$18 per share.
Stockholders sold all the 33.8 million shares in the IPO, cashing in on a strong demand for healthy food for cats and dogs from health-conscious pet lovers.
Blue Buffalo earns about 81 percent of its $917 million revenue from the sale of dry food for cats and dogs. Nearly 70 percent of its sales come from large chains such as PetSmart Inc and Petco Holdings Inc.
Prices for Blue Buffalo’s products range from $54 for dry dog food to as low as $1 for wet canned food.
The 13-year-old company says on its website that its pet food uses real chicken, lamb or fish and no chicken or poultry by-product meals, artificial preservatives, colors or flavors.
However, Nestle SA’s pet products company, Purina PetCare Co, questioned these claims in a lawsuit filed last year. (bit.ly/1j6tQh0)
Wilton, Connecticut-based Blue Buffalo’s stock opened at $27 and touched a high of $27.25 on the Nasdaq on Wednesday.
Private-equity firm Invus Group LLC holds a 62 percent stake in the company.
JPMorgan, Citigroup, Barclays, Deutsche Bank and Morgan Stanley are among the underwriters to the IPO. (Reporting by Neha Dimri in Bengaluru; Editing by Saumyadeb Chakrabarty)