Guzman Y Gomez unveils $2.2 billion IPO

Guzman $2.2bn IPO
The Guzman $2.2bn IPO will supercharge restaurant growth. (Source: guzmanygomez/Facebook)

Guzman y Gomez is expected to list on the ASX on 20 June 2024, with a valuation of $2.2 billion. The fully underwritten float aims to raise $242.5 million, with 11.1 million shares at $22 each, and $42.5 million from a sell-down by some existing holders. 

Primary proceeds will fund GYG’s growth strategy, specifically significant expansion of its corporate restaurant network in Australia.

Current investors, shareholders, brokers, employees and franchisees are the target market for investment; there is no general public offer. The franchisee offer is priced at $18 per share, an 18.2 per cent discount to the offer price of $22. 

Existing shareholders include Aware Super, Cooper Investors, Hyperion Asset Management, Firetrail Investments and QVG Capital

According to AFR, GYG’s major institutional shareholders TDM Growth Partners will hold a 29.7 per cent stake, Barrenjoey Private Capital will have a 9.6 per cent share. They are committing to a voluntary escrow through to the release of the FY25 results. 

Steven Marks, founder and co-CEO, will control 9.9 per cent, with chair Guy Russo holding 5.6 per cent. Co-founder, Robert Hazan stepped down from the board earlier this week.

A $3.9 million net loss in the first half of this financial year delayed the planned ASX listing in February.

Guzman y Gomez $2.2bn IPO to supercharge growth

Since opening in Sydney in 2006, GYG has expanded its network to 210 restaurants across four countries. GYG has 185 restaurants in Australia (62 company-owned), 16 in Singapore, five in Japan and four corporate stores in the US

GYG expects to open 30 new restaurants across Australia in FY25. This will increase to 40 restaurants annually within five years, with a focus on drive thru restaurants.

Marks said “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. 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.” 

Hilton Brett, co-CEO said: “GYG has a strong operational and financial track record, with global network sales increasing from $101 million in FY15 to $759 million in FY23, a CAGR of 29 per cent.”

Brett expects profitability to improve through “compelling restaurant economics”, the opening of new restaurants and increasing sales in existing restaurants and the benefits of increasing scale.

“As a result, we expect Pro Forma EBITDA to grow from $29.3 million in FY23 to $59.9 million in FY25,” Brett said.