Portillo’s Hot Dogs LLC plans to make its public market debut this year, the latest in a series of initial public offerings by catering companies looking to capitalize on this year’s Wall Street rally.

The Chicago-based fast-casual chain confidentially submitted a draft registration statement to federal regulators on Friday, the company said.

The chain, owned by private equity firm Berkshire Partners LLC, is targeting a valuation of $ 2.5 billion to $ 3 billion, according to people close to the company. The shares are expected to start trading by the end of this year.

Portillo’s is on its way to becoming the fourth American restaurant chain to enter public markets in recent months. Salad chain Sweetgreen Inc. announced last month that it was planning to launch an IPO, as did Dutch Bros Coffee Inc., based in Oregon.

Krispy kreme Inc.

returned to public markets this month, but struggled to attract investor interest in the valuation initially targeted. The donut company valued its IPO below expectations, and its shares have hovered around their IPO price of $ 17 since then. European consumer conglomerate JAB Holdings Co. privatized Krispy Kreme in 2016 and remains a major shareholder.

Public equity offerings are hot this summer as companies look to profit from the rebound in the US economy and high stock valuations. During the summer months of June, July and August, bankers expect traditional IPOs to raise at least $ 40 billion, which would be a record during this period. Investor interest in Special Purpose Acquisition Companies, or SPACs, has slowed, while traditional IPOs have rebounded after a brief cooling in the spring.

Few restaurants had launched IPOs in the years leading up to the pandemic. Just two companies, the Japanese food company Kura Sushi USA Inc.

and Muscle Maker health-focused channel Inc.,

has entered public markets in the past five years, according to Dealogic. The Covid-19 pandemic last year put new broadcasts on hold as lockdowns and in-person dining restrictions disrupted restaurant operations.

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Now, many chains are emerging from the pandemic with plans to expand. Companies that had a strong take-out business entering the pandemic gained business when many sit-down restaurants closed. Chains generally had larger financial buffers than independent restaurants to support the downturn.

Restaurants that survived last year’s wave of closures are now seeing sales increase, along with food and labor costs. Operators pass cost increases on to consumers and, in some cases, try to hide these increases to avoid scaring diners away.

Portillo’s, founded in 1963 by Illinois entrepreneur Dick Portillo, offers drive-thru services at all of its establishments and has pre-pandemic delivery deals for customers in search of its hot dogs and cake. chocolate. He continued to open restaurants last year, now owning 68 in nine states. The company generated $ 455 million in sales last year, and its restaurants averaged an annual turnover of $ 7.5 million each, according to data from Technomic Inc., ranking among the competition. .

Newly Hired Portillo Executives at Starbucks Corp.

and Domino’s Pizza Inc.

The chain has increased hourly wages in competitive markets to try to staff its new restaurants.

Write to Heather Haddon at heather.haddon@wsj.com

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Appeared in the print edition of July 17, 2021 as “List of Hot-Dog Eatery Portillo Mixes”.



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