Restaurant Chain Cava Confidentially Files for IPO

Mediterranean fast-casual restaurant chain Cava has confidentially filed for an initial public offering (IPO) with the Securities and Exchange Commission (SEC). This is the first restaurant company to take a step toward a public debut since the year started. Also, Cava has cleared the way for other restaurants that may want to consider IPO after a record of low public debuts last year. From the Ukraine invasion by Russia to the rising inflation, there were fears of a possible recession that caused many companies to withdraw their intentions to go public.

Cava Announces IPO Filing

Cava announced its confidential IPO filing on the 6th of February, with no specificities on the number of shares to be offered. Also, there is currently no fixed price range for the proposed offering. According to the company, the result of the Commission’s review and other factors will determine the structure of the public offering. Cava also said its IPO is subject to the market’s conditions, considering the unexpected events that occurred last year.

Washington-based fast casual pizza restaurant chain MOD Pizza, Torchy’s Tacos, and Fogo de Chao indicated an interest in public offerings in 2021. Cava filing for IPO could trigger an active year of public debuts compared to last year. Per a post by The Wall Street Journal, more restaurant companies plan to test investors’ demand for new public offerings this year. Citing reliable sources, the report revealed that Fogo Hospitality Inc. aims to file for an IPO before the end of this year’s first half. Also, people familiar with Panera Brands Inc. said that the company wants to go public within the first half of 2023.

After its establishment in 2016, Cava Group opened its first fast-casual location in 2011. About seven years later, the company purchased Zoes Kitchen, becoming its parent company and taking the chain private. Now, one of the ways Cava is expanding its footprint is by converting all of Zoes Kitchen’s locations into new Cava restaurants. The Mediterranean company has developed over time and has the potential for continued growth. Pitchbook data shows that it generated $230 million in April 2021, pushing the company’s valuation to $1.71 billion.

Cava’s Achievements

Cava has always been making waves and headlines before the IPO reveal. It unveiled its first mobile order pickup windows in 2019 and planned to invest its 2021 funding into technology. The company has already committed $30 million to launch a processing facility in Virginia. The 57,000-square-foot facility was opened to enhance its products nationally. With more than 300 units, Cava’s same-store sales grew by 37% in 2021. This is despite the massive declines that ate up many businesses due to the coronavirus pandemic. Due to the location in the suburbs, the company could capture most of its consumers who were forced to stay at home amid the global health crisis.