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Report: Bojangles’ planning $125M IPO

Report: Bojangles’ planning $125M IPO

Quick-service operator picks bankers for a planned public offering, sources say

Bojangles’ Famous Chicken ’n Biscuits is planning an initial public offering in the first half of next year that could raise $125 million, according to a report Thursday, joining several other restaurant chains hoping to take advantage of the high valuations investors are giving growth chains.

The Wall Street Journal reported Thursday that Bojangles’ has picked several banks with which to work on the offering. Sources familiar with the deal have confirmed the report to Nation’s Restaurant News.

A Bojangles’ spokeswoman said the company does not comment on those issues.

Bojangles’ is working with several banks, including Bank of America Merrill Lynch, Wells Fargo & Co., Jefferies Group LLC, Barclays PLC, Goldman Sachs Group Inc. and Piper Jaffray, according to the Wall Street Journal.

The Charlotte, N.C.-based operator has long been thought to be considering an IPO. The Boston-based private-equity group Advent International bought the chain from Falfurrias Capital Partners in 2011.

Bojangles’ has expanded considerably since Advent bought the chain. The company has added 68 units in the past two years. Systemwide sales have grown 20 percent, to $922.9 million in 2013, from $767.4 million in 2011, according to Nation’s Restaurant News’ Top 100 census.  Average unit volumes during that time have increased from $1.5 million to $1.66 million.

Based on domestic systemwide sales, Bojangles’ is the 48th largest restaurant chain in the U.S., according to the NRN Top 100.

The chain is also taking market share in the competitive chicken market. Its share of the market among the largest chicken concepts has grown from 5.24 percent in 2011 to 5.59 percent. While that might seem small, it has a larger market share than El Pollo Loco, which went public at $15 a share in July, and is now trading above $37 a share.

The current environment has been friendly to restaurant chains that go public. Concepts such as Zoës Kitchen, Noodles & Company, Potbelly Corporation and El Pollo Loco have all enjoyed strong interest from investors after their IPOs in the past couple of years. Restaurant chains with strong growth projections are receiving strong valuations from public investors.

That is leading several restaurant chains to take the IPO route. J. Alexander’s Holdings filed documents for an offering last week. That came two weeks after Irvine, Calif.-based burger chain Habit Burger filed. Richardson, Texas-based Wingstop, meanwhile, is considering its own IPO. Utah-based Café Rio and New York-based burger chain Shake Shack are both said to be considering offerings.

Already this year, Zoës Kitchen, Papa Murphy’s, El Pollo Loco and Dave & Buster’s have gone public.

But the markets have been unforgiving of chains that don’t perform after their offerings. Noodles’ stock is down 28 percent on the year, and Potbelly is down 41 percent.

Contact Jonathan Maze at [email protected].
Follow him on Twitter: @jonathanmaze

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