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First Watch tries a secondary IPO

Advent International, which owns three-quarters of the breakfast-and-lunch chain's stock, will sell at least 4.5 million shares in a secondary offering.
First Watch secondary ipo
First Watch's majority shareholder will sell some of its stock in a secondary offering. / Photograph: Shutterstock

Advent International, the private equity firm that took First Watch public last year, will sell some of its shares in the breakfast-and-lunch chain in a secondary offering, the company said on Monday.

Advent will sell 4.5 million shares of First Watch and could sell another 675,000 shares if the offering’s underwriters exercise options to buy additional shares.

The private equity firm will still own the vast majority of the chain’s shares, 70.4%, to be exact, assuming the underwriters exercise their options. 

Advent acquired First Watch in 2017. It owns nearly 80% of the shares going into the secondary offering. 

Yet it’s another sign that the market for public offerings in restaurants may be loosening up after spending most of the year virtually frozen.

First Watch was one of five restaurant chains that went public last year. The company went public at $18 a share and rose to over $20. But it declined like many other industry stocks, not to mention the broader market, and at one point was below $12 per share.

The stock is up more than 60% since hitting its 52-week low in March, at least as of market close on Monday. First Watch shares plummeted 13% in morning trading on Tuesday.

First Watch isn’t the only recent IPO to have done a secondary so its sponsor could sell some shares. Portillo’s, the fast-casual beef and hot dog chain, held its own secondary offering earlier this year.

BofA Securities, Goldman Sachs and Jefferies are the joint lead book-running managers for First Watch’s proposed offering.

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