initial public offerings (IPOs) trading on American exchanges

Monday, September 23, 2013

Potbelly prices IPO at $9 to $11 a share

(Reuters) — Sandwich chain Potbelly Corp. expects its initial public offering to be priced at between $9 and $11 per share, raising as much as $82.5 million.
  • 10/2/13 update:  The Chicago-based sandwich chain raised its initial public offering range to $12 to $13, according to a document filed today with the Securities and Exchange Commission. 
  • Trading on Nasdaq under the ticker PBPB is expected to start Oct. 4
Potbelly, which operates 280 shops across the United States, will have a market valuation of $280 million at the mid-point of its expected price range.

The company is selling most of the 7.5 million shares in the IPO.

The company said it's selling just under 7.4 million shares and selling stockholders are selling about 138,000 shares. The company won't receive any proceeds from the selling stockholder sales.

The chain operates in the "fast casual" niche popularized by chains like Chipotle Mexican Grill Inc. (CMG), Panera Bread Co. (PNRA) and newly public Noodles & Co. (NDLS). Those chains are a step up from traditional fast food, but don't require the time or money that waiter-service restaurants demand.

As of June 30, Potbelly operated 286 shops in 18 states and the District of Columbia, the bulk of which are company owned. Potbelly also has 12 franchised locations in the Middle East.

Revenue in the latest fiscal year totaled $274.9 million, up nearly 16% from the prior year. Profit jumped to $24 million from $7.2 million.

Most of the proceeds from the IPO are intended to pay a cash dividend to executive officers, directors and other insiders.

Potbelly began in 1977 as a small antique store in Chicago. To boost sales, the original owner started offering sandwiches and desserts to customers. That owner sold the store in 1996, and a second shop was opened a year later. The chain reached 100 shops in 2005.

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