Guzman y Gomez announces $2.2b IPO
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The news: Fast food chain Guzman y Gomez has announced its initial public offering at a market capitalisation of $2.2 billion, and expects to start trading on the ASX on 20 June under the ticket 'GYG'.
The numbers: GYG unveiled a fully underwritten IPO of 11.1 million shares at a price of $22 per share to raise approximately $242.5 million. This comprises around $200 million in primary proceeds and $42.5 million of secondary selldown on behalf of select existing security holders.
In April, the Australian-owned franchise closed its latest liquidity round at at $1.725 billion valuation.
The company's board, senior management and existing substantial shareholders will represent approximately 62% of GYG’s issued capital on a fully diluted basis, with voluntary escrow arrangements in place for 12 months from listing over approximately 58% of shares on issue.
GYG said it expects sales growth to continue through the opening of 30 new restaurants in the next year, and increasing sales in existing restaurants, with forecasted pro forma EBITDA to grow from $29.3 million in FY23 to $59.9 million in FY25.
Between FY15 and FY23, GYG’s global network sales have increased from $101 million to $759 million and is expected to reach $1.14 billion by FY25, supported by strong comparable sales growth and ongoing network expansion.
GYG opened its first restaurant in Sydney in 2006. GYG has since expanded its network to 210 restaurants across four countries, including 185 in Australia, 16 in Singapore, five in Japan and four in the US.
The context: Sydney-based GYG said primary proceeds of the offer will be used to fund the company's growth strategy over the coming years, primarily focused on the significant expansion of its corporate restaurant network in Australia. The proceeds of the offer will also provide substantial flexibility to accelerate this strategy if appropriate opportunities arise, it said.
GYG noted that it has received "considerable" support and demand from existing shareholders, including Aware Super, Cooper Investors, Hyperion Asset Management, Firetrail Investments and QVG Capital.
GYG’s other existing large institutional shareholders, TDM Growth Partners and Barrenjoey Private Capital, will retain significant investments in GYG post-IPO and are committing to a voluntary escrow through to the release of the FY25 results.
What they said: GYG's founder and co-CEO Steven Marks said: "As we commence the next chapter as an ASX-listed company, our vision to reinvent fast food and change the way the masses eat will remain central to what we do".
"We truly believe that fast food doesn’t have to be bad food and we look forward to sharing our food with more guests across Australia and overseas as we look to realise the opportunity we have to grow our network to more than 1,000 restaurants over the next 20+ years," he said.
The source: Guzman y Gomez media release
