Torchy’s Tacos is moving forward with plans for an IPO, according to Bloomberg.
The brand is reportedly working with Morgan Stanley, Bank of America Corp, and JPMorgan Chase & Co. The news outlet said the IPO could happen as soon as this year. However, there hasn’t been a final decision and plans could change.
In November, Torchy’s announced that it sold a $400 million stake to a new group of investors in order to spark growth. The group is led by General Atlantic, a majority shareholder that initially invested in 2017. It was joined by D1 Capital Partners, T. Rowe Price, Lone Pine Capital, and XN. Torchy’s said it will use the capital injection to enter 10 more states in the next four years.
At the time, Bloomberg described the move as a potential precursor to an IPO filing. Sources told the media outlet that Torchy’s could raise about $300 million and be valued at about $1 billion.
The chain was founded by Michael Rypka and began in a food trailer in Austin, Texas, in 2006. That chain has expanded to more than 80 locations across Texas, Oklahoma, Colorado, Arkansas, Louisiana, Missouri, and Kansas, with an AUV of $3.8 million. The chain opened roughly a dozen stores amid the pandemic, and entered three new markets.
In January 2020, CEO GJ Hart said Torchy’s plans to reach at least 160 stores in the next three years. That growth will coincide with a new managing partner model and revitalized kitchen that will cut wait times from 12 to 15 minutes to seven to nine minutes. The reduction will prove crucial as off-premises orders now account for 60 percent of sales, according to the CEO.
The most recent food and drink concepts to go public, BurgerFi and Landry’s, merged with special acquisition companies to do so. BurgerFi and OPES Acquisition Corp. agreed to merge in June 2020, with an anticipated initial enterprise value of approximately $143 million. In February, Fertitta Entertainment, which includes Golden Nugget Casinos and Landry’s, agreed to join Fast Acquisition Corp. in a deal that will value the company at $6.6 billion.
At least five other restaurant-led SPACs have formed within the past year, including Do it Again Corp., Bite Acquisition Corp., Tastemaker Acquisition Corp., Starboard Value Acquisition Company, and USHG Acquisition Corp.
Kura Sushi USA, a revolving sushi-style restaurant, went the traditional IPO route in 2019.