Benson Hill SPAC Deal: The 'Thing Behind The Thing' For Plant-Based Food Market

Benzinga routinely examines a stock that might be considered a little under the radar. The company may not be well known, but chances are the line of work it’s in is pretty familiar. This is called the “thing behind the thing.”

The growth of plant-based foods is continuing with plant-based meat and other areas gaining entry into grocery stores and restaurants. Calling itself a "picks and shovels" play for the plant-based food revolution, Benson Hill is one of Benzinga’s "thing behind the thing."

About Benson Hill: Benson Hill is going public with Star Peak Corp II STPC in a SPAC merger valuing the company at $1.35 billion.

Founded in 2012, Benson Hill uses artificial intelligence to create proprietary food innovations. Its CropOS combines data, plant and food sciences to create more affordable and better-tasting food.

CropOS uses predictive analytics to simulate tens of millions of genetic outcomes for plants, according to the company. This proprietary technology can shave years off of the traditional crop breeding process, bringing items to market faster and lowering costs for food and ingredient companies.

Benson Hill also offers plant-to-plate traceability that can help validate sustainability and product benefits to customers. The company can help facilitate the broad adoption of plant-based food with partnerships and licensing agreements.

Partners and Investment Team: Among the investors in Benson Hill include BlackRock, Inc. BLK, Van Eck, Hedosophia and Lazard Asset Management. Food company Post Holdings Inc POST is an investor.

Google Ventures, a segment of Alphabet Inc GOOGGOOGL, invested in Benson Hill in 2018 and 2020.

Benson Hill’s two product segments are ingredients and fresh. Current partners for ingredients include Nestle ADR's NSRGY Nestle Purina, General Mill's GIS Blue Buffalo, and Bunge Ltd. BG. Partners for the fresh segment include Kroger Co KR, Public, SYSCO Corporation SYY and US Foods Holding Corp USFD.

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Growth Ahead: The ingredients segment focuses on items such as soybean and yellow peas, including the production of ultra-high protein soybean varieties in 2021 and yellow peas as the fastest-growing protein source for plant-based meats, for which Benson Hill has a two to three-year head start.

The fresh segment is assisting with fresh produce growth.

Segments covered by Benson Hill include animal feed, pet food and human plant-based food ingredients.

The plant-based meat market is expected to be worth $140 billion by 2029, as part of the overall agrifood segment worth $5 trillion globally. The company lists a total addressable market size of $170 billion.

The company believes its commercialization of innovative products in the ingredients segment can see 50% to 100% topline growth annually. The company’s patent portfolio includes more than 200 granted and pending patents.

Going forward, Benson Hill plans to expand its focus on production partnerships, which will provide licensing and royalty revenue. Proprietary products such as soybean meal, soy white flake and soy oil could help land exclusive deals.

Benson Hill is a pure play ESG company, which could help it gain recognition and a place in ESG themed ETFs, a growing sector for investors who want companies sharing similar beliefs.

Financials: Benson Hill had revenue of $102 million in 2020.

The company is forecasting compounded annual revenue growth of 46% from 2020 to 2027. The company targets revenue of $127 million for fiscal 2021 and $161 million for fiscal 2022. A projection of revenue of $1.47 billion in fiscal 2027 was given by the company.

Benson Hill sees partnership and royalty revenue growing at a compounded annual growth rate of 100% beginning in 2023.

The company’s compounded annual growth rate of 50% from 2021 to 2027 comes in higher than some peer plant-based, publicly-traded companies such as Beyond Meat Inc BYND at 40%. The gross margins of 45% for Benson Hill are also higher than the peer group ranging from 20% to 35%.

STPC Price Action: Shares of Star Peak Corp II closed up 0.30% at $9.87. 

(Photo: Benson Hill)