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Ignite Restaurant Group files for $100M IPO

Parent to Joe’s Crab Shack, Brick House Tavern intends to use proceeds to pay debt

Houston-based Ignite Restaurant Group Inc., parent company of the 117-unit Joe’s Crab Shack chain, filed with securities regulators its intent to hold an initial public offering of stock, hoping to raise $100 million.

Ignite did not reveal in its Friday filing how many shares it would sell or what the initial share price would be, but the company did express its intent to use proceeds from the sale to pay down debt. As of March 28, Ignite had $120 million in outstanding debt under a secured credit facility.

The company reported net income of $11.6 million for fiscal 2010, an improvement from the $3.2 million net loss recorded for fiscal 2007. The company reported fiscal 2010 revenue of $351.3 million, which represented an increase of 14.14 percent from the preceding year. In its most recent fiscal quarter, same-store sales increased 9.4 percent, the company reported.

The company changed its name to Ignite Restaurant Group in 2009. Prior to that, it had been named JCS Holdings, resulting from the 2006 sale of 120 Joe’s Crab Shack restaurants to private-equity firm J.H. Whitney Capital Partners from former parent Landry’s Restaurants Inc. The move signaled Ignite’s plan to develop not only the Joe’s casual-dining brand but also its proprietary concept, Brick House Tavern + Tap. There are now 17 locations of Brick House, which first debuted in 2008.

Ignite’s expansion plans detailed in its filing call for 10 Joe’s Crab Shack restaurants and four Brick House units to open in fiscal 2011.

Over the past three fiscal years, Ignite has grown by seven net restaurants, including 14 openings, seven closures and the conversion of three Joe’s Crab Shack units to Brick House locations. As of this month, Joe’s Crab Shack had opened six locations of its new prototype.

Ignite said in its filing with the U.S. Securities and Exchange Commission that Credit Suisse, Baird and Piper Jaffray would underwrite the IPO.

The company is led by chief executive Ray Blanchette, former president and chief operating officer of the Pick Up Stix fast-casual chain.

Joe's Crab Shack booked 2010 system sales of $319.3 million, up 8.6 percent from the preceding year, and tallied 113 restaurants at fiscal-year end. The chain had average annual sales per unit of $2.81 million.

The Brick House Tavern + Tap chain generated fiscal 2010 sales of $32 million, marking an increase of 133.6 percent from the preceding year, the company said. Brick House ended the fiscal year with 13 restaurants, up from 5 at the end of fiscal 2009, and had average annual sales per unit of $3.56 million.

Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN

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