Jimmy John’s has reportedly scrapped plans for an initial public offering shortly before marketing the offering with potential investors, according to Bloomberg.
Jimmy John Liautaud, who owns a majority of the Champaign, Ill.-based sandwich chain, told the publication that he scrapped the plan in October so he could focus on running the company.
The company had been slated to begin its roadshow with potential IPO investors in October, according to the Huffington Post.
Liautaud abandoned the plan to focus on running his chain in the midst of a difficult climate for restaurants, according to Bloomberg.
Jimmy John’s did not respond to a request for comment by press time.
Jimmy John’s decision to remain private halted what would have been a huge restaurant company IPO.
Unlike many chains that have gone public in recent years, Jimmy John’s is well established but still growing. The company is one of the 40 biggest restaurant chains in the country, with $1.8 billion in systemwide sales in 2014, according to Nation’s Restaurant News Top 100 data. Its systemwide sales have increased 39 percent the previous two years. It was the seventh fastest-growing large chain in the country, with more than 2,100 locations.
Jimmy John’s has been exploring a sale or an IPO for well over a year in large part because private-equity group Weston Presidio, which has owned a minority stake in the chain since 2007, has been looking to sell its investment.
Restaurant companies have been able to fetch higher valuations by selling stock to public investors in an IPO than they have been able to get from private-equity groups or other buyers in a sale process. Sources have indicated that Jimmy John’s turned to an IPO when it couldn’t fetch a similar multiple in a sale process.
While the company indicated that its decision was not due to market conditions, it comes as the market for restaurant IPOs appears to be slowing.
The casual-dining chain J. Alexander’s halted its planned IPO this year and instead spun off to investors in parent company Fidelity National Financial. More recently, Habit Restaurants Inc. postponed a secondary offering, citing market conditions.
Contact Jonathan Maze at [email protected].
Follow him on Twitter: @jonathanmaze
