Wingstop Prices IPO Above Range

(RTTNews) - Restaurant chain Wingstop Inc. has priced its initial public offering of 5.80 million shares of its common stock at $19.00 per share, well above the initial estimated price range of $12 to $14 per share.

Dallas, Texas-based Wingstop is offering 2.15 million shares of common stock, while selling stockholders are offering another 3.65 million shares. The chicken wings-focused restaurant chain, on Tuesday, raised its pricing range to $16 to $18 per share after meeting strong demand on its road show.

Wingstop has granted the underwriters a 30-day option to purchase up to an additional 870,000 shares from one of the selling stockholders at the IPO price, less the underwriting discount.

Wingstop intends to capitalize on investors' insatiable appetite for fast-casual restaurant stocks. In January, burger chain Shake Shack Inc. (SHAK) priced its IPO above its previously estimated price range.

The Shake Shack IPO followed a string of successful IPOs by casual dining chains last year, including El Pollo Loco Holdings Inc. (LOCO), Zoe's Kitchen Inc. (ZOES) and Habit Restaurants, Inc. (HABT).

Wingstop's shares are expected to debut on the Nasdaq Global Select Market on Friday, June 12, under the symbol 'WING.'

Morgan Stanley, Jefferies, and Baird are acting as lead joint book-running managers for the proposed offering, while Barclays, Goldman, Sachs & Co., and Wells Fargo Securities are acting as book-running managers.

Upon completion of the offering, private equity firm Roark Capital will continue to own a controlling stake of 69.9 percent in the company.

Wingstop said it will use a portion of the proceeds from the offering to pay a fee in connection with the termination of its management agreement with Roark Capital Management.

Founded in 1994, Wingstop has more than 745 restaurants across the U.S., Mexico, Russia, Singapore, the Philippines, Indonesia and United Arab Emirates. The fast casual restaurant chain specializes in cooked-to-order, hand-sauced and tossed chicken wings offered in 11 proprietary flavors.

As of March 28, 2015, the company's restaurant base was 97 percent franchised, with 726 franchised locations and 19 company-owned restaurants.

For the first quarter ended March 28, 2015, Wingstop's net income declined to $2.55 million or $0.10 per share from $2.98 million or $0.11 per share in the year-ago period. However, total revenue rose to $19.03 million from $16.67 million in the prior-year quarter.

Domestic same store sales for the quarter increased 10.7 percent, compared to an increase of 9.7 percent in the same period last year.