Jun 5, 2023 - Economy

Restaurant chain Cava sets IPO terms, could be valued at $2 billion

Illustration of a bowl of salad made out of money

Illustration: Sarah Grillo/Axios

Cava, a fast-casual Mediterranean restaurant chain with over 250 locations, on Monday began pitching investors on an IPO that could value the company at more than $2 billion.

Why it matters: U.S. IPOs have been few and far between since the beginning of last year, so the entire market will pay close attention to Cava's performance.

  • Were it to price and trade strong, this could rekindle interest from companies beyond the restaurant sector.

Details: Cava disclosed that it's offering 14.44 million shares at between $17 and $19 per share. Were it to price at the top, its market value would be just north of $2.1 billion.

  • The Washington, D.C.-based company plans to list on the New York Stock Exchange under ticker symbol CAVA.
  • It had raised venture capital funding from firms like T. Rowe Price, SWaN & Legend and Revolution Group.
  • Revenue climbed 12.8% last year to around $564 million, while its losses expanded to nearly $59 million.
  • In 2018 the company bought rival Zoe's Kitchen for around $300 million.

The bottom line, per Axios' Kimberly Chin: "There are cracks in the quick-serve restaurant sector due to pressured margins and hot competition, but Cava is increasing its top line and cutting losses, both of which are must-haves for public market investors."

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