Crumbs Cupcake Chain IPO: $66 Million
NEW YORK (TheStreet) -- The delayed IPO of Crumbs Bake Shop, the New York City-based cupcake bakery and retail chain, is scheduled to close on April 21.
The deal to take Crumbs public through a merger with special-purpose acquisition firm 57th Street General Acquisition values the cupcake chain at $66 million, including $27 million in cash and $39 million in stock.
Crumbs' IPO was first announced in January. Once it closes shares will be traded on the NASDAQ.
Crumbs owner Jason Bauer plans to use capital raised in the initial public offering to grow the chain outside the New York and Los Angeles markets, where the bulk of its stores are currently located. Bauer hopes to open Crumbs locations in markets such as Dallas, Atlanta and Denver, with the goal of having 200 stores by 2014.
A publicly traded Crumbs "will be a growth play" for investors, Michael A. Yoshikami, president and chief investment strategist at YCMNET Advisors, told TheStreet in January when reports of a Crumbs IPO first surfaced. He expects investor interest to be strong since Crumbs would represent one of the only ways to bet on the cupcake trend through an exchange-traded equity. Revenue is also likely to show strong growth, Yoshikami said, "but [the] real test will come after buzz declines," and the bakery-retailer "must be able to stand on [a] cash flow story."
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