Inspire Brands filed a draft registration statement Form S-1 with the U.S. Securities and Exchange Commission last week, indicating the company was considering an initial public offering, according to a press release.
Inspire’s sprawling empire of brands — Dunkin’, Baskin-Robbins, Buffalo Wild Wings, Arby’s, Jimmy John’s and Sonic — would make its IPO one of the most significant restaurant listings in the post-COVID era.
That brand system, encompassing breakfast and coffee, casual dining/sports bars, sandwiches, traditional burger QSRs and desserts, would make Inspire one of the most diversified publicly traded restaurant conglomerates. RBI and Yum, which are appropriate comparisons in terms of scale, are both primarily QSR platforms, while Brinker and Bloomin’ are full-service systems. Such diversity of concepts could insulate Inspire from sectoral downturns afflicting individual brands.
Inspire would use “the net proceeds of the proposed offering to repay outstanding indebtedness under its existing term loan facility and pay offering fees and expenses,” according to the press release, with the IPO’s timing subject to SEC review and market conditions. The company said the pricing and number of shares it plans to offer have yet to be determined.
If successful, an Inspire IPO could serve as a blueprint for the future of other portions of Roark Capital’s vast restaurant holdings, which include Subway, GoTo Foods and a majority stake in Dave’s Hot Chicken. Investor interest in Inspire could also nudge other private equity holders with major restaurant systems to mull a public market debut. Jersey Mike’s, owned primarily by Blackstone, also recently filed an S-1 indicating it was interested in an IPO. The success of Black Rock Coffee’s IPO last year could be a sign that public markets have an appetite for growing restaurant brands with strong unit economics.
Despite significant IPO interest, some chains are taking the opposite route, especially in sectors like pizza, where some major brands are experiencing declines. Long-term problems facing both Pizza Hut and Papa Johns could result in those chains going private to insulate themselves from short-term, public market pressures.
