Financing

Cava aims for $2.1B valuation with IPO

The Washington, D.C.-based chain priced its shares between $17 and $19, which would raise more than $274 million at the high end.
Cava restaurant exterior
Cava reported a loss of $59 million in 2022, but the chain is nearing profitability./Photo courtesy of Cava Group Inc.

Cava Group Inc. hopes to raise more than $274 million with the sale of more than 14.44 million shares its initial public offering, the company said Monday.

The Washington, D.C.-based company said it plans to offer 14,444,444 shares of common stock, which will be priced between $17 and $19 per share, which would raise more than $274 million on the high end of that range. An additional 2.2 million shares will be available to underwriters.

With a total of more than 111 million shares to be outstanding after the offering, the IPO would give the fast-casual chain a valuation of more than $2.1 billion.

Cava had confidentially filed for an IPO earlier this year, but went public with disclosures in May.

The IPO, if successful, is also likely to reignite plans to go public by restaurant companies that had put those plans on hold in light of an unwelcoming market. Just days after Cava went public with its intentions, for example, Panera Brands Inc. said it was preparing again for an IPO by tweaking its leadership team.

At the end of the first quarter, Cava had 263 restaurants across 22 states, and another 34 to 44 units were expected to open this year.

In its preliminary prospectus filed with the U.S. Securities and Exchange Commission, Cava reported revenues of $564 million in fiscal 2022, but the company reported a net loss of $59 million for the year, though same-store sales were up more than 14%. Cava's restaurants had an average unit volume of $2.4 million for the year.

In the first quarter, Cava was nearing profitability. The net loss had shrunk to $2 million in the April-ended quarter, compared with a loss of $20 million a year earlier. And same-store sales were up 28% for the quarter.

Shares will be listed on the New York Stock Exchange under the ticker symbol CAVA. Proceeds from the IPO will be used to fund future restaurant growth, as well as for general purposes, including possibly the repayment of loans used to build a new production facility in Virginia.

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