Shake Shack Sets IPO Price Range Of $14-$16/share

(RTTNews) - Burger chain Shake Shack Inc. said in a regulatory filing Tuesday that it expects its initial public offering of 5 million Class A shares to be priced in a range of $14 to $16 per share.

Shake Shack filed its initial prospectus for the IPO with the U.S. Securities and Exchange Commission late last month. The company has applied to have its Class A common stock listed on the New York Stock Exchange under the symbol "SHAK."

The underwriters have been granted an option for a period of 30 days to purchase up to an additional 750,000 shares of Class A common stock solely to cover over-allotments.

Following the offering, the company will have a dual-class share structure: Class A common stock and Class B common stock. Holders of Class A common stock issued in the offering will hold 44.5% of the economic interests and 14.1% of the voting power in the company. Current stockholders such as Union Square Hospitality, Leonard Green & Partners and Meyer will own, through Class A stock, 55.5% of economic interests and 17.5% of voting. Through Class B, those investors will hold the remaining 68.4% of voting power.

Based on about 35.5 million shares outstanding following the offering, the current price range indicates a market valuation of as high as $568 million for Shake Shack.

Shake Shack, known for its Shackburgers, flat-top hot dogs and eponymous shakes, is owned by Union Square Hospitality Group and has 63 locations of which 27 are outside the United States. Shake Shack initially began as a hot-dog cart in Madison Square Park in New York. In 2004, restauranteur Danny Meyer opened a kiosk-style Shake Shack within the park.

Shake Shack reported revenues of $82.5 million for the fiscal year 2013, and revenues of $83.8 million for the nine-month period ended September 2014. Shake Shack's same store sales growth was 5.9% in 2013, compared with 7.1% rise in 2012.

JP Morgan Chase, Morgan Stanley and Goldman Sachs are the major underwriters of the offering.

The Shake Shack IPO follows 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).