Bojangles Inc. set terms Monday for its upcoming initial public offering, pricing shares at a range of $15 to $17, according to a filing with the Securities and Exchange Commission.
The Charlotte, N.C.-based quick-service chicken operator plans to sell 6.3 million shares, and could raise as much as $123 million if its stock is priced at the peak of that range.
The peak price would give Bojangles a market cap of $610 million. The company will trade on the Nasdaq stock exchange under the symbol BOJA. Advent International, the 635-unit chain’s owner, is selling most of the shares and will receive the bulk of the offering proceeds.
Bojangles is the latest in a string of restaurant companies looking to take advantage of a public market that is friendly toward high-growth restaurant chains. For instance, Shake Shack Inc. has seen its stock rise more than 200 percent since its IPO in January.
Several restaurant companies, including The Habit Restaurants Inc., have seen their stock price double on the first day of trading. Others that didn’t double immediately, including El Pollo Loco Inc. and Dave & Buster’s Entertainment Inc., saw their values increase in the weeks after their IPOs as investors discovered their businesses.
Bojangles would enter the market at a time when chicken chains have been performing well. Stock in Popeyes Louisiana Kitchen Inc., for instance, has risen nearly 400 percent since September 2011 amid consistently strong sales. KFC recently reported strong same-store sales in the U.S., including 7-percent growth in the first quarter of this year.
While El Pollo Loco’s stock has declined from its peak in the weeks after its IPO last year, its price remains nearly 90 percent above its offering price from last year.
Meanwhile, private chains such as Chick-fil-A, Zaxby’s and Raising Cane’s are among the fastest-growing restaurant chains in the country.
Bojangles is banking on an offering that is a bit different. Its restaurants have average unit volumes of $1.8 million, due to a strong breakfast business that is unique among chicken chains that serve primarily bone-in chicken. About 38 percent of its sales come before 11 a.m.
The company said in an SEC filing that same-store sales have increased for 19 straight quarters, including 7-percent growth in the fourth quarter of 2014. Revenue has grown an average of 12.8 percent per year between 2011 and 2014, from $299.9 million to $430.5 million.
Same-store sales for Bojangles’ first quarter ended March 29 rose between 7.6 percent and 7.9 percent, the company said in the filing.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, grew from $60 million in 2013 to $69 million in 2014.
Bank of America Merrill Lynch, Wells Fargo Securities, Jefferies, Barclays, Goldman Sachs, Piper Jaffray, William Blair, KeyBanc Capital Markets and RBC Capital Markets are joint bookrunners on the deal.