Karat Packaging Inc. Announces Exercise and Closing of Over-Allotment Option in Public Offering

Rhea-AI Summary

Karat Packaging announced the full exercise of an underwriters' option to purchase an additional 592,500 shares at $16.00 per share from its IPO, generating approximately $9.5 million in gross proceeds. The initial IPO of 3,950,000 shares occurred on April 19, 2021, with this over-allotment closing on April 23, 2021. The offering was managed by Stifel, William Blair, and Truist Securities. The SEC approved the registration statement on April 14, 2021. Karat specializes in environmentally friendly disposable foodservice products.

Positive

• Raised approximately $9.5 million through over-allotment exercise.
• Successful IPO with strong underwriting support from major firms.

Negative

• None.

CHINO, Calif., April 23, 2021 (GLOBE NEWSWIRE) -- Karat Packaging Inc. (“Karat Packaging” or the “Company”) (Nasdaq: KRT), a specialty distributor and manufacturer of environmentally-friendly disposable foodservice products and related items, today announced that the underwriters of its previously announced initial public offering (“IPO”) of 3,950,000 shares of its common stock have fully exercised their option to purchase an additional 592,500 shares of Karat Packaging common stock at the IPO price of $16.00 per share, resulting in additional gross proceeds of approximately $9.5 million, less underwriting discounts and commissions. The initial closing of the offering occurred on April 19, 2021 and the closing of the shares purchased in the over-allotment option occurred on April 23, 2021.

Stifel, William Blair and Truist Securities were lead bookrunning managers for the offering. National Securities Corporation and D.A. Davidson & Co. were co-managers. Akerman LLP served as legal counsel to Karat Packaging and McGuireWoods LLP served as legal counsel to the underwriters.

A registration statement relating to the securities sold in this offering has been filed with the Securities and Exchange Commission (the “SEC”) on Form S-1 (Reg. No. 333-253270) and was declared effective by the SEC on April 14, 2021. This registration statement can be obtained by visiting EDGAR on the SEC website at www.sec.gov.

Copies of the prospectus relating to this offering may be obtained from: Stifel, Nicolaus & Company, Incorporated, One South Street, 15^th Floor, Baltimore, MD 21202, Attention: Syndicate Department, Email: Syndprospectus@stifel.com; William Blair & Company, LLC, 150 North Riverside Plaza, Chicago, IL 60606, Attention: Prospectus Department, Phone: (800) 621-0687, Email: prospectus@williamblair.com; or Truist Securities, Inc., 3333 Peachtree Road NE, 9th floor, Atlanta, Georgia 30326, Attention: Prospectus Department, Email: TruistSecurities.prospectus@Truist.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Karat Packaging Inc.

Karat Packaging Inc. is a specialty distributor and manufacturer of a wide range of environmentally friendly, disposable foodservice products and related items, primarily used by national and regional restaurants and in foodservice settings throughout the United States. Its products include food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves and other products. The Company’s eco-friendly Karat Earth^® line offers quality, sustainably focused products that are made from renewable resources. Karat Packaging also offers customized solutions, including new product development and design, printing, and logistics services.

Cautionary Note Concerning Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company’s registration statement for the initial public offering filed with the SEC. Copies are available on the SEC’s website at www.sec.gov. Karat Packaging undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Investor Relations and Media Contact:         
PondelWilkinson Inc.        
Judy Lin Sfetcu or Roger Pondel        
310-279-5980        
karat@pondel.com         

FAQ

What was the IPO price for Karat Packaging's additional shares?

The IPO price for the additional shares was $16.00 per share.

How many shares did Karat Packaging offer in total?

Karat Packaging initially offered 3,950,000 shares, with an additional 592,500 shares sold through the underwriters' option.

What are the total gross proceeds from Karat Packaging's IPO?

The total gross proceeds from the IPO, including the over-allotment option, are approximately $9.5 million.

When did the over-allotment option for Karat Packaging close?

The over-allotment option closed on April 23, 2021.

Who were the lead underwriters for Karat Packaging's IPO?

The lead underwriters for the IPO were Stifel, William Blair, and Truist Securities.