Chuy’s Sets IPO Terms

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Another food chain is coming public.  The parent company of the Mexican Food restaurant chain of Chuy’s has now set its terms for an initial public offering of 5.833 million shares in a price range to the public of $11 to $13 per share of common stock.  Chuy’s will list its shares under the ticker of “CHUY” on the NASDAQ Global Select Market.

The book running managers are Jefferies and R.W. Baird; co-managers are listed as KeyBanc Capital Markets, Raymond James, and Stephens.  These underwriters have a 30-day overallotment option to buy up to 874,999 shares of common stock.

The chain was founded in Austin, Texas in 1982 by Mike Young and John Zapp and it had a store count of 32 Chuy’s restaurants as of March 25, 2012 located in Texas, Tennessee, Kentucky, Alabama, Indiana, Georgia and Oklahoma.  The stores average $5.0 million per unit for its 18 comparable restaurants for the twelve months ended March 25, 2012.  Keep in mind that the chain only had 8 locations at the end of 2007.

Revenue has grown along with its store count here.  From fiscal year 2007 to the twelve months ended March 25, 2012, Chuy’s annual revenue increased from $42.1 million to $138.9 million and its Adjusted EBITDA increased from $5.7 million to $20.6 million. The company has opened five stores in 2012 and its prospectus shows that it plans to open two to three more stores by the end of this year.

The filing shows that the common stock outstanding after this offering will be 15,043,428 shares after giving effect to the conversion of all series of the company’s preferred stock.  If the overallotment is exercised in full, then the count will be 15,918,427 shares.  At the mid-point of the range and using the overallotment will give an implied market capitalization rate of $190.8 million.

JON C. OGG

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