WASHINGTON (dpa-AFX) - Burger chain Shake Shack Inc. said late Thursday that it has priced its initial public offering of 5 million Class A shares at $21 per share, which is above the previously estimated price range of $17 to $19 per share.
The shares are expected to begin trading on the New York Stock Exchange on Friday, January 30 under the ticker symbol 'SHAK.'
Shake Shack has also granted the underwriters a 30-day option to purchase from the company up to an additional 750,000 Class A shares at the initial public offering price, less the underwriting discount.
The offering is expected to close on February 4.
J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are acting as joint lead book-running managers in the proposed offering. Barclays Capital Inc., Goldman, Sachs & Co., and Jefferies LLC are also acting as book-running managers in the proposed offering. William Blair & Company, L.L.C. and Stifel are acting as co-managers in the proposed offering.
Shake Shack filed its initial prospectus for the IPO with the U.S. Securities and Exchange Commission in late December. Last week, the company set the initial price range of $14 to $16 per share for the IPO, but on Wednesday raised the price range to $17 to $19 per share due to strong investor demand.
Following the offering, the company will have a dual-class share structure: Class A common stock and Class B common stock. Holders of Class A common stock issued in the offering will hold 44.5% of the economic interests and 14.1% of the voting power in the company. Current stockholders such as Union Square Hospitality, Leonard Green & Partners and Meyer will own, through Class A stock, 55.5% of economic interests and 17.5% of voting. Through Class B, those investors will hold the remaining 68.4% of voting power.
Based on about 35.5 million shares outstanding following the offering, the $21 IPO price indicates a market valuation of $745.5 million for Shake Shack.
Shake Shack, known for its Shackburgers, flat-top hot dogs and eponymous shakes, is owned by Union Square Hospitality Group and has 63 locations of which 27 are outside the United States. Shake Shack initially began as a hot-dog cart in Madison Square Park in New York. In 2004, restauranteur Danny Meyer opened a kiosk-style Shake Shack within the park.
Shake Shack reported revenues of $82.5 million for the fiscal year 2013, and revenues of $83.8 million for the nine-month period ended September 2014. Shake Shack's same store sales growth was 5.9% in 2013, compared with 7.1% rise in 2012.
The Shake Shack IPO follows a string of successful IPOs by casual dining chains last year, including El Pollo Loco Holdings Inc. (LOCO), Zoe's Kitchen Inc. (ZOES) and Habit Restaurants, Inc. (HABT).
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