Harvey's, Swiss Chalet owner eyes IPO, sees major growth ahead

Tue Feb 17, 2015 4:01pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Solarina Ho

TORONTO Feb 17 (Reuters) - Privately-held Cara Operations Ltd, the company behind Canadian restaurant staples Swiss Chalet and burger chain Harvey's, is looking to go public again as it aims to capitalize on the recent string of blockbuster restaurant IPOs.

Canada's third-largest restaurant operator said there are significant opportunities for growth over the next five to seven years in its preliminary prospectus filed late last week, ahead of the long weekend.

The prospectus did not give any details on the price or size of the offering.

Cara, which operates 10 brands and more than 800 restaurants across Canada, had C$1.71 billion in sales last year. It went private in 2004 in a leveraged buy-out. Fairfax Financial Holdings invested C$100 million in 2013.

"I don't know if they've got the secret sauce to make it a go a second time," said Baskin Financial Services vice president, Barry Schwartz, but added that the market does have an appetite for it.

The move comes on the heels of successful initial public offerings in the United States from trendy restaurant chains like Shake Shack Inc last month and Habit Restaurants earlier, as hungry investors look for the next Chipotle Mexican Grill. Chipotle stock has sky-rocketed about 1,500 percent since it launched nine years ago.

Changing consumer tastes for higher quality, fresh and customizable menu options have helped drive growth at "fast-casual" restaurants in North America, with the market becoming increasingly crowded and competitive.

Nearly three-quarters of Cara's restaurants are located in Ontario, and going public could help them expand outside of Canada's most populous province.   Continued...