Baja Fresh Hopes IPO Will Bring $58 Million
Fresh Enterprises Inc. of Thousand Oaks, which owns the Baja Fresh Mexican Grill chain of restaurants, filed Thursday to go public. The firm will attempt to cash in on what has been a hot market for restaurant stocks this year.
The company told the Securities and Exchange Commission that it hopes to raise as much as $58 million in the stock offering.
Fresh Enterprises has 157 company-owned and franchise-operated restaurants nationwide, with more than half in California. The company opened 55 of its restaurants last year.
“The market potential outside of California is pretty good for Baja Fresh,” said Stephen Spence, an analyst with St. Louis-based Kenny Securities. “In the fast-casual [restaurant] area, investors are receptive.”
Stocks of many casual restaurant chains have been hot this year: The Standard & Poor’s index of 16 small-cap casual-dining stocks has surged 22% and hit a record high Thursday.
Baja Fresh markets itself as an upscale alternative to traditional fast food, although less expensive than sit-down Mexican chain restaurants.
The average check per restaurant guest is $7.50, the filing said.
The company, which opened its first restaurant in Newbury Park, Calif., in 1990, was founded by Jim and Linda Magglos.
The company’s sales last year totaled $78 million. But profit was slim: Net income was $41,000.
Fresh Enterprises said it would use the net proceeds from the initial public offering for general corporate purposes, including repayment of $1.5 million to Jim Magglos. Expansion costs would absorb $30 million of the IPO proceeds, the filing said.
This year, Fresh Enterprises plans to open 22 company-owned restaurants and 37 franchise-owned restaurants, the firm said.
The filing didn’t indicate how many shares the company plans to sell or the expected price per share. The firm plans to list the stock on Nasdaq under the symbol BAJA.
A competitor of Baja Fresh, Carlsbad-based Rubio’s Restaurants Inc., went public in May 1999 at $10.50 a share.
Rubio’s stock (ticker symbol: RUBO) rose as high as $15.69 in 1999, then plunged as low as $2.56 in 2000. The shares have since recovered somewhat, to $8.24 as of Thursday on Nasdaq.
Banc of America Securities, Credit Suisse First Boston and Thomas Weisel Partners will underwrite Fresh Enterprises’ stock sale.
