Wingstop Files for IPO to Raise Up to $86.25 Million

By Lillian Rizzo 

Wingstop Restaurants Inc., a chicken-wing chain owned by private-equity firm Roark Capital Group, will seek to raise up to $86.25 million in an initial public offering, according to a filing with the Securities and Exchange Commission.

The Dallas company, which didn't specify how many shares it will offer in the IPO, plans to use the proceeds to repay debt, pay a fee for the termination of a management agreement with Roark Capital, and for other general purposes. The company borrowed from its senior secured credit facility and cash on hand to pay a $48 million dividend to shareholders on March 18, according to the filing.

After the company goes public, Roark will own more than 50% of total voting power of common stock.

The company has applied to be listed on Nasdaq under the stock ticker symbol WING. Morgan Stanley & Co., Jefferies LLC and Robert W. Baird & Co., are the lead underwriters of the IPO.

Wingstop had $20.9 million in earnings before interest, taxes, depreciation and amortization for the year ended Dec. 27, an increase from about $17.9 million the previous year, according to the filing. Total revenue increased 14.3% year-over-year to $67.4 million.

Founded in 1994, the chain has 712 restaurants, 97% of them franchised, across 36 states and six countries, the filing said. Wingstop's number of domestic restaurants has increased 37.5% since the end of 2011, while domestic same-store sales grew through 11 straight quarters.

Atlanta-based Roark acquired Wingstop in 2010, in a deal valued at between $80 million to $90 million, Dow Jones's LBO Wire reported at the time, citing people familiar with the matter. Around half of that deal was in the form of debt from Wells Fargo & Co. and GE Capital, and involved mezzanine financing from Arrowhead Mezzanine LLC and an equity rollover from management.

The Wall Street Journal reported in October that Wingstop was planning an IPO, potentially valuing the company at roughly $500 million.

Write to Lillian Rizzo at [e-mail]

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