El Pollo Loco Makes Big Bucks, Surging Nearly 30% at Stock Debut

NEW YORK (TheStreet) -- El Pollo Loco shares surged nearly 30% following its stock debut on the Nasdaq. The fast-casual chicken chain, which raised $107 million after pricing 7.14 million shares late Thursday at $15 a share, opened trading at $19. At 11:30 a.m., the stock was trading even higher at $19.40. The price was at the upper end of the $13 to $15 a share range given in its Securities and Exchange Commission registration filing. Read More: Chipotle Is a "Once-in-a-Decade" Brand: Analyst Headquartered in Costa Mesa, Calif., El Pollo Loco, Spanish for "The Crazy Chicken," plans to use net proceeds from the offering to repay debt. Jefferies, Morgan Stanley and Baird are all acting as joint book-runners. William Blair and Stifel are acting as co-managers in the offering. Read More: How PizzaRev Plans to be the Chipotle of Pizza A healthier play on Yum! Brands' Taco Bell-and-KFC combination restaurants, El Pollo Loco has 400 stores split between company-owned stores and franchised locations. The chain is known for its fire-grilled chicken and Mexican-themed menu items. El Pollo Loco is the latest fast-casual restaurant to sell shares in the public markets. Other restaurant chains to go public recently include Potbelly and Papa Murphy's , both of which have seen shares trade below their IPO prices. "El Pollo Loco has a steady and reliable customer base and is a healthier alternative to the fried chicken component in this category. Their ability to 'make it' in their home market of Southern California speaks to good cost controls and internal systems. Key for them is to maintain quality and cleanliness in some older stores," writes restaurant consultant Tom Kelley in an email to TheStreet. El Pollo Loco is targeting 2,300 U.S. restaurants for the long term. It plans to grow the number of restaurants by 8% to 10% annually, at first by adding company-owned stores, but also by "strategically" developing franchisee relationships, according to the filing. Read More: Papa Murphy's Prices Low, But Heats Up in Trading "We believe we are well-positioned to take advantage of significant growth opportunities because of our differentiated QSR+ positioning, signature fire-grilled chicken, disciplined business model and strong unit economics," the company said in its SEC filing. "We plan to continue to expand our business and drive restaurant sales growth, improve margins and enhance our competitive positioning." TheStreet will be speaking with El Pollo Loco CEO Steve Sather later today. --Written by Laurie Kulikowski in New York. Follow @LKulikowski // 0;if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); // ]]>

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