Hotel Chocolate to melt the hearts of investors?

Despite my lengthy time of watching M&A from the side-lines, there are few announced IPOs that really pique my interest. The ones that have caught my eye have typically been high flying “Unicorns” like US tech firms Square or Box, or companies that hold a personal interest like Manchester United or some of the luxury goods manufacturers like Prada.

But yesterday’s announcement that Hotel Chocolate, the British chocolatier, is planning an IPO on the London Stock Exchange has interested me for both personal and professional reasons. From a personal perspective I love their chocolate and I think their stores are imaginative and a chocolate addicts paradise, and their chocolate tasting club brings the concept of wine tasting and wine connoisseurs to the world of chocolate.

From a professional perspective, this IPO intrigues me as well. The company is looking to raise a reported £50m, which will allow it, and I quote, “to accelerate the many initiatives that we have in place, in particular additional investment in our British chocolate manufacturing, in new stores and in our digital offering".

I looked at how many other chocolate retailers/chocolate manufacturers (cocoa growers) had raised funds via an IPO since 2000 and the number was 10, compared with 56 companies that had chosen the PE/VC option and raised over double the amount of capital (£411m). Quite a difference.

Given that the company has grown from inception in 2004 to having over 80 stores in the UK alone in 12 years, I’m wondering if Hotel Chocolat’s choice of an IPO to raise funds is a way of capitalising on its uniqueness in terms of the place it holds in chocolate lovers/investors’ hearts.