Dissecting Guzman y Gomez's billion-dollar valuation as it hurtles towards an IPO
The Mexican food chain is poised to become one of the most hotly discussed IPOs on the ASX in years. Despite recent controversies, its largest shareholder TDM is convinced it’s onto a generational winner.
Popular Mexican chain Guzman y Gomez is undoubtedly one of the biggest consumer success stories of the last decade in Australian business. But the company has in recent months been hit by a string of negative headlines, as a salacious court dispute with a former US employee and an internal overhaul spilled into public view.
And if its goal of listing on the ASX is realised, the scrutiny will only intensify.
Negative press aside, in corners of the investment community a debate about the company's multi-billion dollar valuation is already starting to bubble to the surface. In one corner are its supporters, including major shareholder and respected fund manager TDM Growth Partners which owns 40% of the company. In the other corner are financial analysis sceptics, who argue to varying degrees that while Guzman is a good business, a mooted (but never confirmed) $2 billion valuation target is too high a price.
That such a debate is even possible reflects the fact that admirably for a private company, Guzman publicly reported its financial results last year. The move points to its long-held ambitions to list on the ASX, which could happen later this year or early next.
