Reporter's Notebook
Bojangles files for an IPO

Bojangles files for an IPO

Bojangles, Inc. plans to go public. The Charlotte-based chicken chain filed documents on Monday with the Securities and Exchange Commission for an initial public offering.

In so doing, Bojangles becomes the latest limited service restaurant chain hoping to take advantage of the high prices restaurant companies are receiving by selling stock to the public.

The 600-unit chain, which boasts $1.8 million average unit volumes and system sales of more than $1 billion, hopes to raise as much as $100 million in an offering. The funds will go primarily to the company’s owner, Advent International, which bought the chain in 2011, according to SEC documents.

Bojangles has enjoyed 19 straight quarters of same-store sales growth, including 7 percent in the fourth quarter of 2014. Between 2011 and 2014, revenues grew at a compound annual growth rate of 12.8 percent, from $299.9 million in 2011 to $430.5 million last year.

Unit count has grown an average of 7 percent a year over that time, to 622 locations, while net income last year was $26 million, up from $24 million in 2013. Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, grew from $60 million in 2013 to $69 million in 2014.

Restaurant chains have been receiving massive valuations by going public, with several companies including Habit Restaurants Inc. and Shake Shack Inc., seeing their stock prices more than double on the first day of trading.


Bojangles would give investors another QSR chicken chain in which to invest, following Popeyes Louisiana Kitchen and the more recently public El Pollo Loco, as well as KFC, part of the multi-concept Yum Brands. Popeye’s has been among the best performing restaurant stocks on Wall Street, while El Pollo Loco stock more than doubled in the days following its IPO last year.

Bojangles also offers something many other chains in the chicken category don’t: Breakfast. The company gets 38 percent of its restaurant revenues before 11 a.m., according to securities filings, and breakfast is the fastest growing daypart in the restaurant industry, according to information from the market research firm NPD.

Operating income has grown 32 percent, from $39 million in 2012 to $51.6 million last year. EBITDA margin last year was 16 percent, down from 16.1 percent in 2013. The company has $228.2 million in long-term debt.

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