Recent IPO News
We note a couple of things that caught our eye heading into the holiday weekend.
Potbelly Corp., the “fast-growing neighborhood sandwich concept offering toasty warm sandwiches, signature salads and other fresh menu items served by engaging people in an environment that reflects the Potbelly brand,” filed its IPO registration statement.
We happen to be a big fan of Potbelly. In particular, we are partial to the turkey and swiss with mustard and hot peppers. We may be looking at Lunch #2 for the day after typing this paragraph.
We haven’t looked too closely at the filing just yet, but we note that Potbelly operates 280 company-owned shops and there are six domestic franchised shops. There are also twelve franchises in the Middle East.
Year-over-year shop growth was 16% while year-over-year revenue growth was 15.5%, which seems to merit some closer investigation.
GE plans to spin-off its consumer lending business in an IPO next year, according to news reports. The report was ambiguous as to whether GE would actually conduct a spin-off of the company in conjunction with an IPO, which would involve a distribution of the remaining ownership interests to GE shareholders, or if it was just selling a stake in the business, which isn’t really a “spin-off.” We’ll keep an eye out for it next year.
ROI Acquisition Corp. II/Clinton Group
ROI II filed its own IPO registration restatement. The Deuce is an investment vehicle sponsored by affiliates of Underdisclosed favorite, Clinton Group. Since I’m sure you follow Underdisclosed.com carefully, you know that this is not a business associated with a certain former elected official to the executive branch of the U.S. federal government. It is an activist investing firm, whose recent activities include harassing Stillwater Mining Company and Quality Systems.
The Deuce is a SPAC looking to acquire companies that:
-are in a middle market business;
-are established companies with proven track records;
-have, or have the potential for, strong free cash flow generation;
-have a strong competitive position;
-have an experienced management team;
-have a business with revenue and earnings growth or potential for revenue and earnings growth; and
-could benefit from being a public company.
ROI I went public in 2012 and acquired the company that became EveryWare Global, Inc. in May 2013. EVRY closed at $10.02 on the date of the closing, has traded as high as $13.74 and is trading at $12.90 as of this writing.
Another notable fact is the participation of Jamal Mashburn in the ROI deals. The former Kentucky Wildcat star who played on our two favorite NBA teams (Go Heat and Mavericks!)** agreed to serve as a director of each of the SPACs.
*We own a small stake in GE.
**We are not bandwagon fans, at least in this instance. This writer is from South Florida and has been a Miami Heat fan since it was an expansion team and has lived in Dallas for over 15 years.