By Jessica Yun
Guzman y Gomez has pulled forward plans to debut on the Australian stock exchange and is now preparing to float on June 20 with a valuation of $2.2 billion under the ticker ‘GYG’.
Australia’s fastest-growing burrito chain, which has been working towards a float for years, has revealed a fully underwritten initial public offering of 11.1 million shares at $22 per share to raise $242.5 million
Guzman y Gomez co-chief Hilton Brett (left) and founder Steven Marks.
Around $200 million will be used to turbocharge Guzman y Gomez’s store footprint in Australia, which is currently at 185.The burrito chain hopes to have more than 1000 restaurants in its network over the next 20 years, and is planning 30 new Australian restaurants for the 2025 financial year.
The company also has 16 stores in Singapore, five in Japan and four in the US, where the Mexican fast food market is far fiercer. Three of Guzman y Gomez’ four American stores are currently unprofitable. Only the Naperville, Chicago store is profitable, with two others close to breaking even.
Guzman y Gomez last month raised $135 million in a financing round that added Cooper Investors, Hyperion Asset Management, Firetrail Investments and QVG Capital to its list of shareholders. Co-chief executive Hilton Brett said these investors had expressed their preference that the burrito chain be listed rather than unlisted.
“When they invested, there was demand from them in excess of what we were able to supply in terms of the amount of money we raised at the pre-IPO around,” he told this masthead.
“We made the decision that on the back of the demand and the strong support that we received from them in the pre-IPO round, that we would bring the IPO forward. So these investors have cornerstoned this deal.”
Guzman y Gomez expects its earnings to grow from $29.3 million in the 2023 financial year to nearly $60 million in the 2025 financial year. The company sold $759 million worth of burritos, tacos, bowls and more in the 2023 financial year, a 32 per cent rise from the year before.
While the past two years have been quiet for initial public offerings as higher interest rates and volatile sharemarkets dampen investor appetite, Guzman y Gomez founder and co-CEO Steven Marks believes the float will perform well regardless.
“If [interest] rates are high, rates are low, people still need to eat,” said Marks. “We’re very confident on the macro landscape and where GYG sits.”
TDM Growth Partners and Barrenjoey will remain the burrito chain’s largest investors. The float will not have a general public offer, instead there will be a priority offer to existing shareholders, an employee offer, and a franchisee offer at a discounted rate of $18 per share.
The board of directors, senior management, and TDM and Barrenjoey will make up 62 per cent of Guzman y Gomez’ shares, with the remaining allocated to incoming investors. Retail investors will only be able to buy shares through a broker, the names of which will be announced in the coming days.
The chief executive officer role is shared between founder Marks, and Brett, who was operating partner at TDM Growth Partners, the private investment firm that is Guzman y Gomez’s biggest shareholder.
Brett was a board director of Guzman y Gomez for five years before being appointed to the co-chief role last October.
Guzman y Gomez recently poached Kmart and Target’s commercial and strategy general manager Erik du Plessis to fill its chief financial officer role after the former executive in that position, Rebecca Lowde, left after just 10 months with the Mexican chain.
The IPO prospectus will be issued on May 31, with the offer to open on June 10.
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