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Don Dion (donalddion@gmail.com, @DRDInvestments) is the owner and Chief Investment Officer of DRD Investments, LLC, based in Naples, FL. and Williamstown, MA., a family office focused on managing a long/short hedge fund, real estate assets and various other financial assets for the Dion family.... More
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  • Levy Acquisition IPO Is A Wild Card 0 comments
    Nov 12, 2013 12:20 PM

    Levy Acquisition Corp (LEVYU), a blank check firm that intends to acquire businesses in its management team's areas of experience-restaurants and hospitality-plans to raise $150 million in its upcoming IPO this week. The Chicago, IL-based firm will offer 15.0 million shares at a price of $10 per share. If the IPO is successful, LEVYU will command a market value of $188 million. See
    http://www.sec.gov/Archives/edgar/data/1585583/000114420413054104/v355877_s1.htm
    LEVYU filed on October 7, 2013.
    Lead Underwriters: Citigroup Global Markets Inc.
    Underwriters: I-Bankers Securities, Maxim Group LLC, National Securities Corp.

    Summary
    LEVYU is a blank check company that intends to acquire businesses in the restaurant and hospitality sectors. The firm will be led by Chairman and CEO Lawrence F. Levy, who built Levy Restaurants from the ground up and also founded Levy Family Partners, a somewhat similar investment firm that has invested in numerous successful restaurant and hotel businesses. LEVYU will essentially function as a vehicle for Mr. Levy and his management team to make larger investments than the $25 million maximum that Levy Family Partners generally runs under. The firm has not yet targeted or discussed any specific potential investments.

    Valuation
    LEVYU offers the following figures in its S-1 balance sheet:

    Revenue: $0.00
    Net Loss: ($5,169.00)
    Total Assets: $89,925.00
    Total Liabilities: $70,094.00
    Stockholders' Equity: $19,831.00

    LEVYU does not have especially meaningful financial figures at this point, since it intends to acquire the funds to begin doing business through the IPO.

    Management
    Chairman and CEO Lawrence F. Levy is a Co-Founder and Chairman of the Chicago-based Levy Restaurants, an international food service company that Mr. Levy co-founded with his brother in 1978. As Executive Chairman and CEO, Mr. Levy was responsible for all aspects of operations, strategy, growth, and various other functions of the firm. During his time as Executive Chairman and after he became non-executive chairman in 2006, Mr. Levy has continued to actively participate in significant company initiatives and to advise senior management on all aspects of the company, including strategy, operations and corporate development.

    Mr. Levy is also the Founder and a Managing Partner of Levy Family Partners, a family investment office that oversees a broad portfolio of public and private investments, including hospitality, real estate, and technology companies. Mr. Levy received his B.S. and M.B.A. from Northwestern University.

    Conclusion
    Investors in LEVYU will essentially be betting on the investment and management ability of Mr. Levy and his team. It should be noted that neither Mr. Levy nor his team have previously been involved in an investment enterprise of this magnitude; however, we believe that his significant experience in evaluating and investing in restaurants and hospitality businesses will give LEVYU a strong possibility of success.

    We rate this IPO neutral at the $10 price target and we will wait and see what they acquire and how those investments perform before considering buying this stock.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Themes: ipo-analysis
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