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Based in Austin, TX, Chuy's Holdings (NASDAQ:CHUY) scheduled a $70 million IPO with a market capitalization of $180 million at a price range mid-point of $12, for Tuesday July 24, 2012.

Seven other IPOs are scheduled for the week of July 23. Full IPO calendar available here.

CHUY's filed an updated [S-1] July 11, 2012. Manager, Joint Managers: Jefferies/ Baird.

Summary

CHUY is growing, full-service Mexican and Tex Mex chain of 32 restaurants based in Texas. From January 1, 2012 to the end of 2016, CHUY expects to open a total of 50 to 55 new restaurants.

IPO proceeds are allocated to repay debt and made a distribution to preferred stockholders. No IPO money is allocated for internal growth.

Based on valuation metrics (see 'compare' below), CHUY is priced between Texas Roadhouse on the low side and BJ's Restaurants on the high side.

Conclusion

Recent IPOs have been priced to favor investors, perhaps as a backlash from the Facebook disaster. IPOdesktop believes CHUY will increase from its IPO price.

anualizing March 2012 qtr

Cap (Millions)

Sales

Earnings

BookValue

Tangible BV

Net Profit %

Chuy's Holdings

$180

1.22

25

2.8

9.5

4.9%

Texas Roadhouse (NASDAQ:TXRH)

$1,290

0.99

17

2.5

3.3

5.8%

BJ's Restaurants (NASDAQ:BJRI)

$1,170

1.74

34

3.4

3.5

5.1%

Business

As of March 25, 2012, CHY operated 32 Mexican and Tex Mex Chuy's restaurants across Texas, Tennessee, Kentucky, Alabama, Indiana, Georgia and Oklahoma.

CHUY's restaurants have a common décor, but CHUY believes each location is unique in format, offering an "unchained" look and feel, as expressed by CHUY's motto "If you've seen one Chuy's, you've seen one Chuy's!" CHUY's believes its restaurants have an upbeat, funky, eclectic, somewhat irreverent atmosphere while still maintaining a family-friendly environment.

Growth

CHUY established a presence in Texas, the Southeast and the Midwest, with restaurants in multiple large markets in these regions. CHUY's growth plan over the next five years focuses on developing additional locations in existing core markets, new core markets and in smaller markets surrounding each of those core markets

CHUY has opened five restaurants year-to-date in 2012, including the first restaurants in Oklahoma and Florida. CHUY plans to open an additional two to three restaurants by the end of the year. From January 1, 2012 to the end of 2016 CHUY expects to open a total of 50 to 55 new restaurants.

Venture Capital

Pre-IPO, Goode Partners LLC owns 98% of CHUY. Goode Partners LLC acquired CHUY's in 2006

Competition

Main competitors include Texas Roadhouse, Cheddar's Casual Cafe and BJ's Restaurants. CHUY also compete with other providers of Tex Mex and Mexican fare and adjacent segments, including casual and fast casual segments.

Seasonality

Restaurant sales are typically higher during the spring and summer months as well as in December.

Employees

As of March 25, 2012, CHUY had 3,954 employees, including 38 corporate management and staff personnel, 276 restaurant level managers and 3,640 hourly employees. None of the employees are unionized or covered by a collective bargaining agreement.

Use of Proceeds

CHUY expects to net $64 million from its IPO with proceeds allocated as follows:

  • $20.8 million to repay all outstanding loans and accrued and unpaid interest, servicing fees, commitment fees and letter of credit fees under CHUY's credit facility with Wells Fargo Capital Finance, Inc.;
  • $10.1 million to repay the outstanding principal, interest and expenses under CHUY's credit facility with HBK Investments L.P.;
  • $1.6 million to pay the expenses of lenders; and
  • $20.0 million to pay a dividend of $19.0 million to stockholders and other special cash bonus payments to certain members of management.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: This CHUY IPO report is based on a reading and analysis of CHUY's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: Chuy's Holdings