NEW YORK (TheStreet) -- Shares of Fogo de Chao (FOGO) continued their move higher on Friday after the Brazilian steakhouse's bankers priced its IPO shares above their initial range on the Nasdaq. Fogo shares priced at $20 apiece, above their initial range of $16 to $18 dollars each.
Fogo's CEO Larry Johnson said the company will use the proceeds from the IPO to pay down debt while at the same time refinancing existing debt. Fogo de Chao, which means "fire pit" in Portuguese, is owned by private equity firm Thomas H. Lee Partners. After the IPO, Thomas H. Lee will continue to own about 80% of the restaurant chain.
The chain competes with Capital Grille, Ruth's Chris (RUTH) and Del Frisco's (DFRG). Johnson said, "We think we're in a unique sector, it's what we call 'approachable fine dining' and, certainly in the Brazilian steakhouse segment, we think we have defined that in the U.S. we think we dominate it. We feel good about being the leader in that space."Johnson said one of the chain's cost advantages is that most of the cooking is done by tableside chefs, which helps to lower labor costs. Fogo first opened in Brazil in 1979 and expanded to the U.S. in 1997. The chain now has 37 outlets, 26 of which are in the United States and the rest are in Brazil and Mexico. Johnson said there is still more opportunity to expand in Brazil but he also believes Fogo has an opportunity to open 'at least another hundred in the U.S.' and grow at about 10% a year.
In terms of international expansion, Johnson said the "Fogo concep"' is one that travels well to other international destinations. The chain plans to open its first middle east outpost in Dubai next year. Fogo is also exploring the possibility of opening in Canada and Australia.