Pizza chain Papa Murphy's sets terms for $70 million IPO

By Cami Joner, Columbian retail & real estate reporter

Published:

Updated: April 22, 2014, 4:24 PM

 

Vancouver-based take-and-bake pizza chain Papa Murphy’s International has established a stock price for its initial public offering of $11 to $13 per share, according to Nasdaq.com.

The company hopes to raise $70 million by offering 5.8 million shares of the privately held company. At the midpoint of the proposed range, Papa Murphy’s would command a fully diluted market value of $204 million, Nasdaq.com reported. Jefferies, Baird and Wells Fargo Securities are managing the stock offering.

Papa Murphy’s began as Papa Aldo’s and became Papa Murphy’s International through a 1995 merger between Papa Aldo’s and Murphy’s Pizza. Papa Murphy’s booked $80 million in sales for the fiscal year ended Dec. 31, 2013. The company plans to list on the NASDAQ under the symbol FRSH.

Nasdaq.com reported that Papa Murphy’s initially filed its IPO confidentially on Dec. 16, 2013. It submitted its public filing to the U.S. Securities and Exchange commission March 11.

As of Dec. 30, the chain had 1,418 stores systemwide, including 1,349 franchise and 69 company-owned stores. It expects this year to grow by between 105 and 115 stores. The company sees potential for up to 4,500 outlets.

Papa Murphy’s lost $2.6 million on total revenues of $80.5 million in 2013. It lost $2.1 million in 2012 and $606,000 in 2011. When adjusted for interest, taxes, depreciation and amortization it reported earnings of $24.4 million in 2013, an increase of 10.4 percent over its $22.1 million in adjusted earnings in 2012.

The move underscores a rush to the IPO market by companies in the retail, technology and other sectors, which are entering the IPO market at the fastest rate in 14 years, the Wall Street Journal reported last month. Regional Mexican restaurant chain Cafe Rio Inc. and fast-food chicken chain El Pollo Loco Holdings Inc. also are moving toward IPOs, the newspaper reported.

Mediterranean-inspired chain Zoe’s Kitchen Inc., which held an IPO on April 11, set its initial price in the $11 to $13 range and later increasing its target to between $13 and $15 per share, according to Nation’s Restaurant News. The Texas-based chain closed at $24.72 on the first day of trading.


Business editor Gordon Oliver contributed to this story.