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Bravo Brio Restaurant Group files for IPO

Bravo Brio Restaurant Group files for IPO

Bravo Brio Restaurant Group Inc. filed with securities regulators this week to raise up to $172.5 million in an initial public offering that would be used to repay debt.

Columbus, Ohio-based Bravo Brio operates more than 80 upper-scale casual-dining Italian restaurants under the Bravo! Cucina Italiana and Brio Tuscan Grille brands. The company has been owned since 2006 by Bravo Development Holdings LLC, which is controlled by private-equity firms Bruckmann, Rosser, Sherrill & Co. Management L.P. and Castle Harlan Inc.

Since 2005, Bravo Brio has grown from 49 restaurants in 19 states to 83 locations in 27 states at the end of March. Revenue from 2005 to 2009 increased from $198.8 million to $311.7 million, the company said.

After several years of losses, the company swung to profit in the past year. In the first quarter ended March 28, Bravo Brio reported profit of $2.5 million compared with a loss of $1.3 million in the same quarter a year ago. Revenues rose to $81.8 million from $73.6 million.

For fiscal 2009, the company reported profit of $3.4 million on revenues of $311.7 million, compared to a 2008 net loss of $61.4 million on revenue of $300.8 million.

The company has 46 Bravo! Cucina Italiana units in 19 states and 37 Brio Tuscan Grilles in 17 states. Average check for a Bravo unit is $19.37 per guest and at a Brio unit $25.12 per guest, according to documents filed with the Securities and Exchange Commission on Thursday. Both concepts first debuted in Columbus, with Bravo opening in 1992 and Brio in 1999.

The company is headed by Saed Mohseni, president and chief executive, who had not returned phone calls by press time.

Mohseni joined Bravo Brio in February 2007 after serving as chief executive of McCormick & Schmick’s Seafood Restaurants Inc.

“We believe that both of our brands appeal to a broad base of consumers, especially to women,” the company said in SEC filings, with estimates that women make up 62 percent of guest traffic at Bravo and 65 percent of guest traffic at Brio.

The company said the two brands are complementary and can be located in the same markets.

“Both Bravo and Brio have their own corporate executive chef who develops recipes and menu items with differentiated flavor profiles and price points,” the company said. “The differentiated qualities of our brands allow us to operate in significantly more locations than would be possible with one brand, including high-density residential areas, shopping malls, lifestyle centers and other high-traffic locations.”

The company said a Bravo unit requires a net cash investment of about $1.8 million and a Brio about $2.2 million. “We target a cash-on-cash return beginning in the third operating year for both of our restaurants of between 30 percent and 40 percent,” the company stated.

Bravo Brio has about $85.8 million in loans under its existing senior credit facilities and $32.4 million in 13.25 percent senior subordinated secured notes.

The company seeks to be listed on the Nasdaq exchange as “BBRG.”

Contact Ron Ruggless at [email protected].

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