Skip navigation

Bravo Brio raises $140M in IPO

First U.S. restaurant IPO in four years

Bravo Brio Restaurant Group Inc., an Italian restaurant company with 83 restaurants, raised $140 million in an initial public offering Thursday, the first restaurant IPO in four years.

The Columbus, Ohio-based Bravo Brio, which operates 46 Bravo! Cucina Italiana restaurants and 37 Brio Tuscan Grille locations, offered 10 million shares priced at $14 per share on the Nasdaq exchange.

The company’s stock, traded under the BBRG symbol, rose 14 percent on its first day of trading to close at $15.95.

Bravo Brio’s debut on Wall Street was the first North American restaurant IPO since 2006, when the owners of Burger King, Chipotle and Tim Hortons each went public. In 2007, shares of the parent to Einstein Noah, which at the time were traded on the Pink Sheets, moved to a major stock exchange with an offering on the Nasdaq.

One source said there had been pent-up demand for a restaurant offering, and investors felt confident an improved economy would make the sale successful.

Half of Bravo Brio’s sold shares were offered by the company itself and the other half were offered by existing shareholders, primarily private-equity firms Bruckman, Rosser, Sherrill & Co. Management LP and Castle Harlan Inc.

According to filings with federal securities regulators, Bravo Brio reported profit of $8 million on revenue of $171 million for the six months ended June 27. Its same-store sales rose 1.6 percent. The company holds $85.8 million in loans under existing senior credit facilities and $32.4 million in 13.25-percent senior subordinated secured notes.

Although the offering was expected to close Oct. 26, Bravo Brio president and chief executive Saed Mohseni said most of the BBRG shares had been placed by Thursday morning with top institutional shareholders that were interested in long-term investment in restaurant companies.

Mohseni said the money raised by the company would be used to pay down debt.

“We only needed to raise about $75 million,” Mohseni said. “We are now only one-time leveraged.

“We’ll be a self-funded company and can continue to build restaurants from our current cash flow,” he added.

About half of Bravo Brio’s restaurants have been opened since Castle Harlan and Bruckmann, Rosser, Sherrill acquired the company in June 2006. Mohseni said the company planned to open between 45 and 50 units over the next five years.

Whether they would open more Bravo! or Brio units depended on the real estate they found, household income in the markets and population density within a 20-minute drive of the location, he said.

“Brio would go next to a Nordstrom,” Mohseni said. “Bravo would go next to a Macy’s.”

The average per-person check at Brio is $25.12 and at Bravo is $19.37, according to the company’s SEC filing.

A market-changing IPO

Commenting on the Bravo Brio deal, David Pittaway, senior managing director for the restaurant company’s owner Castle Harlan, said he began consulting with investment banks at the beginning of the year to develop plans to sell the restaurant company.

“They believed that the stock market was now more receptive to initial public offerings than they had been in the past two years,” he said.

He added that the IPO’s underwriters felt that there was a pent-up demand for a “high-quality restaurant offering.”

Pittaway noted that the New York-based private equity firm received about a 250-percent return on its investment, taking into account the money made from the sale of nearly 2.5 million of Castle Harlan’s shares in the company, plus the value of the shares it still held.

The successful IPO was an indication of an improved economy, Pittaway said. He also cited the latest Knapp-Track sales indicators, which had pointed to improving consumer traffic at casual-dining restaurants for the past several months, as another positive indicator.

Contact Bret Thorn at [email protected].

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.