By Scott Murdoch
SYDNEY (Reuters) - Australian fast food chain Guzman y Gomez (GYG) is aiming to raise A$242.5 million ($160.75 million) in a June initial public offering, according to a company statement on Friday, in a deal that would be the country's largest new share sale in a year.
GYG is looking to sell 11.1 million shares at A$22 each which will value the food chain that specialises in Mexican food at A$2.2 billion.
The deal will be made up of A$200 million in primary proceeds and A$42.5 million from a secondary selldown from some existing shareholders.
A raising of the proposed size would make GYG's IPO the largest in almost a year, since Redox raised in A$404 million in mid-2023.
Australian IPO activity fell 75% in the first quarter of 2024, according to LSEG data, as the result of volatile global financial markets dimming the confidence of companies and investors to buy into new deals.
GYG raised A$135 million in a pre-IPO funding ealier this year which valued the business at A$18 a share or A$1.76 billion, according to the company's executives. The round bought in QVG Capital, Firetrail Investments, Cooper Investors and Hyperion Asset Management as investors.
"There were requests at the time for significantly more stock than we could accommodate," GYG's co-chief executive Hilton Brett told Reuters.
"Our pre-IPO investors have long had a strong preference for us to be listed. We have been preparing for a long time, the business is ready and we have been trading very well."
The four pre-IPO round investors, along with Aware Super, are cornerstone shareholders, whose demand has fully underwritten the IPO. The ownership of those five investors will be scaled back after the deal is completed.
Institutional shareholders TDM Growth Partners and Barrenjoey Private Capital will remain on the share registry after the IPO.
GYG began in Sydney in 2006 and now has more than 200 restaurants globally, according to its website
GYG's board, senior management and existing major shareholders will represent about 62% of the company's issued capital on a fully diluted basis after the IPO, the company said.
GYG shares will start trading on the Australian Securities Exchange on June 20.
($1 = 1.5085 Australian dollars)