Guzman y Gomez surges to $3 billion valuation on ASX debut


Mexican fast-food restaurant Guzman y Gomez has floated on the ASX, and is trading at a share price of $30 (at the time of writing) – up 36% on company expectations.
An exterior view of the Guzman Y Gomez Mexican Kitchen on June 13, 2024 in Port Macquarie, Australia. Popular Australian fast-food chain Guzman y Gomez has announced it will undergo an initial public offering or “IPO” later this month, listing itself on the Australian Stock Exchange (ASX). The move will value the company at $2.2 billion. An IPO – sometimes also called a company float – signifies the first time that a privately owned company lists its shares on a public stock exchange.

The restaurant, founded by best friends Steven Marks and Robert Hazan in Sydney back in 2006, is worth about $3 billion, after its initial public offering (IPO) well exceeded expectations.

Guzman y Gomez, trading as GYG on the Australian Securities Exchange (ASX), offered 11.1 million shares at $22-a-piece, but as of 2:30pm AEST, shares were up 36% to $30.01.

So far, Guzman y Gomez has expanded its network to 210 restaurants across four countries, including 185 in Australia, 16 in Singapore, five in Japan and four in the US.

The company announced it would list on the ASX in late May, expecting a valuation of $2.2 billion. It said the primary proceeds of the IPO would be used to support the company’s growth strategy, primarily focused on the expansion of its corporate restaurant network in Australia.

The IPO was not open to the general public.

“As we commence the next chapter as an ASX-listed company, our vision to reinvent fast food and change the way the masses eat will remain central to what we do,” Marks, founder and co-CEO, said in a statement.

“We truly believe that fast food doesn’t have to be bad food and we look forward to sharing our food with more guests across Australia and overseas as we look to realise the opportunity we have to grow our network to more than 1,000 restaurants over the next 20+ years.”

The company’s global network sales increased from $101 million in FY15 to $759 million in FY23, growing at a compound annual growth rate of 29%. Co-CEO Hilton Brett said the company expects it pro-forma EBITDA to grow from $29.3 million in FY23 to $59.9 million in FY25.

“We expect our sales growth to continue through the opening of new restaurants and increasing sales in existing restaurants,” Brett said. “We also expect our profitability to improve as we continue to improve our execution in restaurants and we further leverage the benefits of our increasing scale.”

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