OPA! CAVA Group (CAVA) priced its IPO at $22.00 – $2.00 above the top of its recently raised price range of $19.00 to $20.00. The Mediterranean fast-casual restaurant chain raised $317.78 million by pricing 14.44 million shares, the same number of shares in the prospectus, at $22.00 on Wednesday night (June 14, 2023). In CAVA’s case, the IPO price turned out to be in tune with the word on the Street.
CAVA’s Greek and Mediterranean menu gives customers the option to “build your own” meal – similar to Chipotle Mexican Grill (CMG). CAVA was founded in 2006 in Rockville, Maryland, by three high school friends, who were all the sons of Greek immigrants.
The pricing at $22.00 gives CAVA Group a valuation of $2.45 billion.
CAVA’s stock is expected to start trading Thursday (June 15, 2023) on the New York Stock Exchange.
J.P.Morgan, Jefferies, Citigroup, Morgan Stanley and Piper Sandler were the joint book-runners. Baird, Stifel and William Blair also served as book-runners, according to CAVA’s news release tonight. Capital One Securities, Blaylock Van and Drexel Hamilton were the co-managers.
Demand for CAVA’s IPO – the first traditional IPO priced in June – picked up speed this week after Jim Cramer talked about the deal on CNBC.
When CAVA launched its IPO early last week, The Wall Street Journal described the deal as a test of whether an unprofitable company could go public in today’s IPO market.
Cornerstone investors, including T. Rowe Price, had indicated interest in buying up to $100 million of the IPO.
Money for Growth
CAVA Group, based in Washington, D.C., operates 263 restaurants in 22 states and D.C.
The company says it will use the IPO proceeds for expansion. CAVA plans to open about 34 to 44 more restaurants this year – with a target of running a total of about 300 restaurants – in 24 states and D.C. by late 2023, according to the prospectus.
“People say the food is fantastic,” a seasoned IPO investor says.
CAVA Group has strong revenue growth, offset by a history of net losses and relatively low levels of cash on hand, according to financial statements in the prospectus.
For the 12 months that ended March 31, 2023, CAVA Group reported a net loss of $41.1 million on revenue of $608.2 million.
(For more information about this company, please check the IPO Calendar and the individual IPO Profiles found on IPOScoop.com’s website.)
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