IPO Watch: Fogo De Chao Sets Debut Price At $20 Per Share

(RTTNews) - Brazilian steakhouse chain Fogo de Chao has priced its initial public offering of 4.41 million shares of its common stock above its expected price range.

Fogo de Chao has priced the IPO at $20 per share, above its expected price range of $16 to $18 per share. The underwriters for the offering will also have a 30-day option to buy up to 661,764 additional shares of common stock.

Fogo de Chao expects its common stock to begin trading on the Nasdaq on June 19, 2015 under the ticker symbol 'FOGO.' The offering is expected to close on June 24, 2015.

Jefferies LLC and J.P. Morgan Securities LLC are acting as joint book-running managers in the proposed offering.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Piper Jaffray & Co., Wells Fargo Securities, LLC and Macquarie Capital (USA) Inc. are also acting as book-running managers.

Fogo plans to use a part of the proceeds from its IPO to repay debt as well as for restaurant development and working capital.

Fogo's Brazilian steakhouse, or churrascaria, is specialized in fire-roasting high-quality meats utilizing the centuries-old Southern Brazilian cooking technique of churrasco. The name Fogo de Chao means "fire on the ground."

The first Fogo de Chão opened in Brazil in 1979. Fogo's first U.S. location opened in Dallas in 1997. Brazilian private equity firm, GP Investments, made an initial investment in Fogo in 2006 and sold its shares to American private equity firm Thomas Lee Partners in 2012.

Fogo has 26 restaurants in the U.S., 10 in Brazil and one joint venture restaurant in Mexico. The company reported fiscal 2014 revenues of $262.3 million in revenue and profit of $7 million.

Fogo plans to continue opening eateries, with the goal of increasing its company-owned restaurant count by at least 10 percent annually over the next five years. North America will be its primary target for growth.

Fogo is also looking at other markets in Asia, Australia, Canada, Europe, Mexico, the Middle East and South America.

Fogo has joined the bandwagon of quick-service restaurants going public, intending to capitalize on investors' insatiable appetite for fast-casual restaurant stocks.

Last Friday, shares of chicken wings-focused restaurant chain Wingstop Inc. (WING) closed 61 percent higher in its debut.

In January, burger chain Shake Shack Inc. (SHAK) priced its IPO above its previously estimated price range. The Shake Shack IPO followed a string of successful IPOs by casual dining chains last year, including El Pollo Loco Holdings Inc. (LOCO), Zoe's Kitchen Inc. (ZOES) and Habit Restaurants, Inc. (HABT).