Mediterranean restaurant chain Cava confidentially files for IPO
Modelled on Chipotle's Mexican grill idea, Cava offers build-your-own Mediterranean meals. The company had set up its first fast-casual location in 2011
Mediterranean eatery chain Cava has confidentially filed for an Initial Public Offering, becoming the first restaurant company to do so in 2023. As per media reports, Cava stated that its public issue will be subject to market conditions and other factors, including approval from the Securities and Exchange Commission (SEC). Cava has also not notified the price range of the offering or the number of shares in the proposed public issue.
The announcement comes at a time when the ongoing war in Ukraine, fears of global recession and rising inflation led to very few companies filing their initial public offerings. Many, including Cava chairman and investor Ron Shaich’s firm Panera Bread, actually scrapped their public issue plans. Formed in 2006, Cava is known for its dips and spreads, like tzatziki, spicy hummus, and tahini dressing, which are sold at Whole Foods and other grocery stores.
Modelled on Chipotle’s Mexican grill idea, Cava offers build-your-own Mediterranean meals. The company had set up its first fast-casual location in 2011. In 2018, it acquired Zoës Kitchen, a competing Mediterranean restaurant, for $300 million. The deal allowed the company to expand its footprint, bringing into its control 260 Zoës locations in 20 states. As per Reuters, the deal created the biggest restaurant operator in the Mediterranean category. It also widened Cava’s footprint in the United States from 66 locations to 327 in 24 states.
In 2019, Cava opened its first Innovation Kitchen in August 2019 in Washington DC. According to data from Pitchbook, the restaurant company raised $230 million in April 2021 at a valuation of $1.71 billion.
Investors have had mixed reactions to initial public offerings of restaurant chains. Fast casual salad chain, Sweetgreen, had gone public in 2021. But the company has since then seen its shares lose half their value over concerns regarding the company’s profitability.
Brazilian steakhouse chain Fogo de Chão filed for a public offering in 2021, but has not announced any details about it. Fogo had earlier gone public in 2015, but had issues in winning over its investors. The restaurant chain was sold for $560 million to private-equity group Rhone Capital in 2018.
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