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If nothing changes and the offering takes place, Torchy’s Tacos could raise as much as $300 million. Besides, its valuation could reach about $1 billion.
Texas-based cult-favorite food chain Torchy’s Tacos is reportedly planning to conduct an Initial Public Offering (IPO). According to those familiar with the matter, the event can take place as soon as this year. Notably, Torchy’s Tacos has already chosen the banks for the IPO, among them are JPMorgan Chase (NYSE: JPM), Morgan Stanley (NYSE: MS), and Bank of America Corp. (NYSE: BAC).
As for the details of the IPO, not much is known. Some say that Torchy’s Tacos has not made a final decision on the IPO yet and might abandon the plans. However, if nothing changes and the offering takes place, the company could raise as much as $300 million. Besides, its valuation could reach about $1 billion.
Neither Torchy’s Tacos, nor the banks’ representatives commented on the news.
Torchy’s Tacos Ahead of IPO
The story of Torchy’s Tacos started in Austin, Texas back in 2001. Initially, its founder Mike Rypka had only a food truck. In 2006, he had little more than a trailer, a Vespa, and a menu offering 10 to 12 different kinds of tacos. At that time, Rypka started selling snacks outside of the Austin City Limits festival grounds. Since then, the company has grown into a cult restaurant chain with more than 75 locations in 10 states.
In 2020 alone, Torchy’s Tacos opened 12 new restaurants. Although the initial plan was to open 20 new locations, the company was lucky to end at 12. The company opened multiple restaurants including three new states during the pandemic.
Notably, Torchy’s restaurants rake in particularly high revenues, with an average of $4 million annually at each location.
Currently, Torchy’s Tacos operates under the business name of Success Foods Management Group LLC. In 2017, it built a strategic partnership with growth equity firm General Atlantic. Besides, in 2020, the company sold an additional stake to a group backed by General Atlantic for about $400 million. Among its investors, there are also global investment firms D1 Capital Partners, T. Rowe Price, Lone Pine Capital, and XN.
The company is doing well but strives to achieve more. In particular, Torchy’s Tacos is planning to expand its geography in the coming years. Its goal is to double in size by the end of 2023. In 2020, during an investment conference in Orlando, Torchy’s Tacos CEO G.J. Hart indicated plans of the chain to jump to around 160 by the end of 2023, in less than four years. Hart also said he hopes to have restaurants in a total of 15 states by that time.