The sports bar company Twin Peaks, which is the first restaurant IPO of the year and could serve as a litmus test for others wishing to go public, begins trading on the Nasdaq on Thursday under the symbol TWNP.
For a number of years, the IPO market has been slow, especially for consumer companies. Many businesses were deterred from going public by rising interest rates, rising inflation, wary consumers, and the possibility of decreased valuations. Due to market conditions, several businesses decided not to try their luck on the public markets but instead to look for a sale. Even exceptional successes like the Cava sIPO failed to persuade others to follow in its footsteps.
However, many people are hoping that this year would see a thaw in the IPO market.
According to Nick Einhorn, vice president of research at Renaissance Capital, a provider of pre-IPO research and ETFs with an IPO focus, last year was a better year than 2023, and we anticipate that 2025 will see more IPOs than 2024. More consumer IPOs might undoubtedly be part of that.
This year, Twin Peaks won’t be the first consumer brand to take the leap, and that initial appearance might not give people confidence.
Producer of porkThe Hong Kong-based WH Group subsidiary Smithfield Foods went public on Tuesday. When the company first went public, its shares dropped 7% from their $20 IPO price. The business had already reduced the number of shares it offered by 8.1 million and set the price below its advertised range. U.S. trade concerns with Mexico, Smithfield’s ties to China, and potential immigration rules that would increase labor expenses are some of major challenges.
According to an investment presentation released by ownerFat Brands, Twin Peaks, a competitor of Hooters renowned for its skimpy uniform, is comparatively modest, with an estimated equity worth of $1.04 billion to $1.28 billion and 115 locations. (Last year, Andy Wiederhorn, the chair of Fat Brands, and the company were charged with a crime related to a purported $47 million fraudulent loan scheme; both have rejected the accusations.)
Twin Peaks is being spun off by Fat Brands, which intends to utilize the proceeds to settle its balance sheet debt.
Three further restaurant businesses are keeping an eye on the IPO market in anticipation of their potential to go public:
Panera Brands
For a number of years, JAB Holding, the Reimann family’s investment division, has sought to remove Panera Brands—the parent company of Panera Bread and Einstein Bros. Bagels—from its holdings. Panera Bread was first acquired by JAB for $7.5 billion in 2017.
Danny Meyer’s special purpose acquisition firm announced an investment in Panera in 2021 that would support the company’s IPO. However, citing market conditions, the two parties canceled the agreement by the middle of 2022.
Panera Brands filed a private application to go public in December 2023, one and a half years later. The company linked the shakeup to its ultimate IPO preparations and disclosed a CEO transition six months following the confidential filing.
But there was never a public filing. As more people choose to cook at home rather than eat out, the restaurant business started to witness a decline in spending.
Additionally, Panera’s Charged Lemonade went popular for all the wrong reasons; following many wrongful death cases linked to the highly caffeinated beverage, the business took it from its menu.In October, Panera reached a settlement with the initial plaintiff.
When Panera’s CEO departed earlier this month, the firm appointed its top financial officer to serve as interim CEO. Given its changing leadership, it seems doubtful that Panera will make another attempt to go public this year.
Fogo de Chao
Bain Capital announced a year and a half ago that it was purchasing the rapidly expanding Brazilian steakhouse company Fogo de Chao. In 2021, the chain filed to go public, just like Krispy Kreme, Sweetgreen, and Dutch Bros., but it missed the window.
There are more than 100 Fogo de Chao locations worldwide, with 76 in the United States alone. This year, the business intends to open 15 more eateries.
Fogo de Chao will be ready when the IPO market is.
Barry McGowan, the CEO of Fogo de Chao, told CNBC during the ICR Conference in Orlando earlier in January that the company would launch if the option was available. It is my hope that we will observe the consumer markets this year. I believe it will begin this year or the following year.
Since the firm made three S-1 files when it initially went public and seven before Bain acquired it, McGowan quipped that Tony Laday, Fogo de Chao’s longstanding CFO, has filed more S-1 filings than any other chief financial officer.
Bain’s financing has allowed Fogo de Chao to delay going public.
We’re not rushing to leave. The last thing we want is to file seven times. Before we file, we want to be more sure,” McGowan stated.
Inspire Brands
Through a series of acquisitions, Roark Capital put up Inspire Brands, a restaurant giant.
Arby’s, Jimmy John’s, Sonic, Buffalo Wild Wings, Dunkin’, and Baskin Robbins are all part of Inspire’s portfolio. It has about 32,600 restaurants worldwide under all of its brands, and its system revenues amount to $30 billion.
Roark was in early-stage IPO talks with possible advisers and was looking for a $20 billion value for Inspire, according to a Bloomberg report from about a year ago. Since then, though, it’s been crickets.
Nevertheless, Pitchbook listed 50 private equity-backed companies that may go public in 2025, including Inspire Brands.
Private equity investors would undoubtedly wish to sell their stake at some point, and initial public offerings (IPOs) are frequently a means of doing so, according to Einhorn.
Additionally, Inspire’s leadership team is more steady than Panera’s. Paul Brown, the company’s CEO, was a co-founder and has been in that position since 2018. Following Inspire’s acquisition of her previous firm, Dunkin, CFO Kate Jaspon joined the company in 2021. She served as a vice president at Dunkin’ during its own initial public offering (IPO) over ten years ago.
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