Jerrold Bregman Speaks to Restaurant Dive on the Anticipated IPO of Jersey Mike’s
Jerrold Bregman recently spoke with Restaurant Dive about the restaurant industry’s revival of IPO activity after a long hiatus since 2021. The article, titled “Jersey Mike’s IPO reflects growing investor appetite for restaurants,” analyzes the anticipated IPO of sub sandwich Jersey Mike’s restaurant chain, a chain owned by private equity giant Blackstone.
In the piece, Jerry highlights the successful nearly $300 million IPO of Black Rock Coffee, a brand also owned by Blackstone.
“The successful IPO of Black Rock Coffee last September demonstrated robust investor hunger for growth-oriented restaurant chains. It is probably no coincidence that Jersey Mike’s — backed by the deep pockets of Blackstone — has also recently thrown its hat into the IPO ring,” he tells Restaurant Dive.
Jerry then discusses both the pros and cons of a company going public, especially for sandwich chains like Arby’s and Dunkin’, owned by Inspire Brands.
“A successful IPO could help Inspire’s owner, Roark Capital Group, pay down some $3 billion in debt that Inspire used to acquire Dunkin’ and Baskin-Robbin’s in 2020 for $11.3 billion. The positioning of the IPO, which could unleash some $2 billion in fresh capital, stands as a resounding testament to the success of that transformative 2020 acquisition. Lightening that debt burden will free up cash flow on a going-forward basis, positioning the company for continued expansion, bold new ventures and sustained growth.”
In contrast, the risks include financial transparency. Jerry further outlines how “Companies often get terrific ideas from minority or activist shareholders. It becomes problematic when … management isn’t responsive and they’re not getting the job done and they’re not listening to minority shareholders.”
However, if Inspire Brands lands its anticipated $20 billion valuation, it could be one of the largest IPOs in restaurant history.
“Though I don’t have crystal ball, and our firm does not represent any of the participants in connection with Inspire Brands’ contemplated IPO, I would say this much with confidence: Inspire Brands’ announced IPO is a resounding net positive for the industry and for investors alike, even if it is likely to only ratchet up the competitive pressure on your neighborhood mom-and-pop eatery,” Jerry concludes.