- Mexican restaurant chain business Tortilla is planning to publicly list on the AIM sub market on or around 8 October
- The company has an estimated market valuation of £70 million
- The group plans to expand into 45 new locations in the next 5 years
Mexican casual dining restaurant chain Tortilla Mexican Grill said it is planning an initial public offering (IPO) at the London Stock Exchange’s submarket, the Alternative Investment Market (AIM).
Tortilla’s IPO plans
The IPO is expected to be floated on or around 8 October next month and is expected to have a valuation of around £70 million. An independent investment bank, Liberum is the nominated advisor for the IPO transaction.
The chain aims to use the proceeds from the IPO to expand into 45 new sites in the next 5 years. It also plans to use the proceeds to look at more franchising and licensing opportunities as part of its growth strategy.
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Tortilla currently has 62 sites worldwide, of which 50 are located in the UK. Moreover, 26 of those UK based branches are in London.
Additionally, 2 of the UK based branches are franchised by FTSE 250 index constituent and UK based contract food service company the SSP Group (LON: SSPG).
The Tortilla Mexican Grill group was founded in 2007. The group appointed ex-boss at popular Asian food chain Wagamama, Emma Woods as its non-executive chairperson and has also brought on board UK bowling alley Holly wood Bowl’s Laurence Keen as its non-executive director.
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While the UK has seen a recent IPO boom this year, it’s mostly been in tech-based companies.
The hospitality sector has been struggling with the rising cost of living expenses, pingdemic and supply chain related workforce shortages, amongst a host of other factors. This would indicate that it may not be the right macro environment for a restaurant chain to go public.
However, Tortilla is confident about its IPO timing given its strategic shift to delivery services, operating across smaller sites and for its use of cloud-based kitchen in order to respond to covid-19 impact. Thereby proving its operating flexibility in the face of the pandemic.
The company’s directors, however expect the group can benefit off of securing attractive rental rates and incentive packages against the backdrop of pandemic affected commercial real estate sector and the broader hospitality industry.
Also, the Mexican style cuisine is well positioned to grow within the food delivery market. The group specialises in Tex-Mex cuisine, which is a California inspired Mexican food style of preparation.
The news also comes just days after another restaurant chain, Yo! Sushi, reported it is potentially planning on listing on the LSE around mid-October next month.