Cava Group will debut on the New York Stock Exchange Thursday after pricing its initial public offering at the higher end of its target, suggesting solid demand for shares in the fast-casual restaurant chain.
In a muted market for new listings, Cava will sell 14.44 million common shares at $22 each, the company said late Wednesday. That's from its prior range of between $19 and $20 a share and the initial range of $17 to $19.\
The $22 level would value the Washington, D.C.-based restaurant chain at around $2.46 billion.
Cava will raise around $335 million directly from the listing and plans to use the proceeds to fund new restaurant openings and pay down current debt linked to a new production facility in Virginia.
The shares will be listed on the NYSE under the ticker symbol CAVA' with a first trade expected later in the Thursday session.
Founded in 2006, with its first restaurant opening in 2011, the Mediterranean-themed dining group acquired Zoe's Kitchen in 2018, taking its rival private in a $300 million deal. That move expanded its reach as it rebranded the acquired restaurants under the Cava banner.
It now has 263 U.S-based locations, with plans to have as many as 1,000 restaurants by 2032.
For 2022 Cava posted a net loss of $37.4 million on sales of $564.1 million, according to Securities and Exchange Commission filings.
Cava's listing may also give a boost to the dormant IPO market of 2023, which has seen only 8 of the 33 U.S.-listed IPOs raise more than $50 million, according to data from EY.
The largest so far this year has been that of Kenvue, the consumer health care company spun out of Johnson & Johnson (JNJ) last month, with a market value of $48 billion.
Potential IPOs over the coming months include Arm, the SoftBank-owned chipmaker expected to list on the Nasdaq.
Multiple media reports suggest Intel is in talks with Arm to be one of the lead investors in the $10 billion IPO, as it would give CEO Pat Gelsinger an inside track on the Arm-designed chips Intel will need to compete with rivals such as Taiwan Semiconductor and Samsung.
Digital payments processing group Stripe, which raised $4 billion in a February funding that valued it at $55 billion, could also test the IPO waters.
But having lost its chief financial officer, Dhivya Suryadevara, earlier this year, amid ongoing profitability challenges, it may opt to delay until 2024.
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