Mexican fast-food chain Guzman y Gomez launches initial public offering, to launch on ASX in June at $22

Quick-service Mexican restaurant Guzman y Gomez is to launch onto the Australian Securities Exchange next month, with an estimated market capitalisation above $2 billion.

The chain with 210 restaurants worldwide says it has received considerable support and demand from its existing shareholders, and the primary proceeds of its public float are to be used to support its growth strategy.

It issued a prospectus on Friday and will open its initial public offering progressively from June 10. It expects a market cap of about $2.2b.

The board is chaired by Guy Russo, the former managing director of Kmart and chief executive of McDonald’s Australia. He is currently a director of Westfield owner Scentre Group.

The fully underwritten initial public offering of 11.1 million shares will be priced at $22 a share, with an aim to raise $242.5m. Shares will be offered to institutional investors and on a retail basis to broker firms, existing shareholders and eligible Guzman y Gomez employees and franchisees. But there is no general public offer.

Founder and co-chief executive Steven Marks said the company’s vision to reinvent fast food and “change the way the masses eat” would stay central to what it does.

“We truly believe that fast food doesn’t have to be bad food and we look forward to sharing our food with more guests across Australia and overseas as we look to realise the opportunity we have to grow our network to more than 1000 restaurants over the next 20+ years,” Mr Marks said in a statement.

Co-CEO Hilton Brett said Guzman y Gomez had a strong financial track record — with sales across the global network increasing from $101m in the 2015 financial year to $759m in the 2023 financial year.

“We expect our sales growth to continue through the opening of new restaurants and increasing sales in existing restaurants,” he said. “We also expect our profitability to improve as we continue to improve our execution in restaurants and we further leverage the benefits of our increasing scale.”

Guzman y Gomez has 185 outlets in Australia — 123 owned by franchisees and 62 corporate-owned. Elsewhere, there are 16 in Singapore and five in Japan owned and operated by separate master franchisees and four corporate restaurants in the US.

It has a varied mix of store models — some featuring drive-thru ordering, others in suburban shopping strips, as well as some in food courts and on university campuses.

The company plans to open another 30 restaurants in Australia in the 2025 financial year and expects this number could grow to 40 a year within five years, with a focus on drive-thru outlets. Within 20 years, it expects to have more than 1000 restaurants in Australia.

The stock is expected to start conditional trading on the ASX from June 20, and on a normal settlement basis from June 25.

“As a former CEO of Australia’s largest quick-service restaurant, I immediately recognised the qualities that make GYG a truly great QSR brand — attention to detail, commitment to the guest experience, and an obsession with food quality and speed,” Mr Russo said.

“These core principles are central to GYG’s track record of exceptional performance and growth, as well as its future growth opportunity in Australia and overseas.”