By Lisa Beilfuss
Shares of Bojangles' Inc. soared as much as 47% in their market
debut Friday as investors piled into the North Carolina-based
chicken chain.
The stock opened at $26.55, 40% above its initial public
offering price of $19, and quickly ran to a high of $27.97 before
retreating. The shares, listed on the Nasdaq under the symbol
"BOJA," recently traded at $25.10 in afternoon trading.
The current stock price values the company at about $900
million.
Earlier this week, the company upped the terms of the offering
and said it expected shares to price between $18 and $19 a
share.
In an interview, Chief Executive Clifton Rutledge said, "It's
been a great day for our brand and a great day for our employees
and franchisees."
Bojangles' hopes to build on Americans' growing appetite for
breakfast on the go, and it is entering the market as KFC, the
chicken chain owned by Yum Brands Inc., last quarter reported its
strongest U.S. same-store sales growth in a decade.
The restaurant operator sells a variety of southern fare,
including breakfast biscuits and fried chicken dinners, in addition
to salads and wraps. Breakfast represents about 38% of sales.
Over the next five to seven years, Mr. Rutledge said the company
could "double its footprint" while taking a disciplined approach to
store growth.
The CEO projects store growth between 7%-8%, a rate that is in
line with its store expansion over the past several years.
"We won't jump states--it's not about putting dots on a map,"
the CEO said. For now, Bojangles' plans to concentrate growth in
North Carolina and adjacent states, but it could eventually open
shops outside of the region.
Founded in 1977, Bojangles' counted 258 company-operated and 377
franchised restaurants at the end of March. In 2014, the company
generated $430.5 million in revenue, up 15% from a year
earlier.
The offering was led by Bank of America Corp, Wells Fargo &
Co. and Jefferies.
Restaurant stocks traditionally have performed well in market
debuts. In the past 10 years, the average one-day pop for
restaurant stocks topped 40%, according to Dealogic.
Shares of Shake Shack Inc. and Habit Restaurants Inc., the last
two restaurants to go public, more than doubled in their
stock-market debuts. The restaurant IPO before those burger chains,
and what many investors view as Bojangles' closest peer, was El
Pollo Loco Holdings Inc. Its stock jumped 60% in its first day of
trading.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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