Wingstop Files for IPO, Seeks to Raise $86 Million

NEW YORK (TheDeal) – Roark Capital Partners-backed chicken wing restaurant chain Wingstop on Wednesday filed for an initial public offering, as it seeks to raise about $86 million in capital.

The Dallas-based company, which first filed confidentially with the Securities and Exchange Commission (SEC) on March 27, has been a portfolio company of Roark Capital for five years.

Wingstop plans to list its shares on Nasdaq under the ticker symbol WING. It has not specified the number of shares to be offered or the price range.

Roark Capital acquired Wingstop in April 2010 from Gemini Investors. Sources told The Deal at the time that the transaction was valued at $80 million to $90 million, or about 7 to 8 times Ebitda.

In May 2010, GE Capital's franchise finance unit announced it co-led the funding of a $36 million debt facility for Roark's purchase of Wingstop.

Since then, the chicken wing chain has paid a $48 million shareholder dividend this year, as well as a $38.5 million dividend last year and a $19.3 million dividend in 2012.

Wingstop is the world's largest fast-food chicken wing-focused restaurant chain, according to its IPO filing with the SEC. As of December 27, it had 693 franchise locations and 19 company-owned restaurants across 36 states and in six countries.

The company generated $9 million in net income on $67.4 million in revenue, as well as $24.4 million in adjusted Ebitda, last year, compared with $7.5 million in net income on $59 million in revenue, and $19.5 million in adjusted Ebitda, for 2013.

Wingstop plans to use the IPO proceeds to repay debt and pay a fee in connection with the termination of its management agreement with Roark Capital Management. It also plans to use the proceeds for general corporate purposes.

Wingstop had total long-term debt of $88.9 million at the end of 2014.

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