In this article, sports bar chain Twin Peaks is set to begin trading on the Nasdaq on Thursday under the ticker symbol “TWNP.” This marks the first restaurant initial public offering of the year and could serve as a test for other companies considering going public.
The IPO market has been relatively subdued in recent years, especially for consumer-focused companies. Factors such as rising inflation, higher interest rates, cautious consumer behavior, and concerns about lower valuations have deterred many companies from pursuing IPOs. Some companies have opted for sales instead of going public due to market conditions. Even successful IPOs like Cava’s have not necessarily encouraged others to follow suit.
However, there is optimism that the IPO market may improve this year. Nick Einhorn, vice president of research at Renaissance Capital, anticipates more IPO activity in 2025 compared to 2024, potentially including more consumer IPOs.
Twin Peaks is not the only consumer company making its debut this year, as pork producer Smithfield Foods recently began trading. However, Smithfield faced challenges, including a 7% drop in share price during its market debut, downsizing its offering, and concerns related to its ties to China and U.S. trade tensions.
Twin Peaks, known for its revealing uniforms and positioned as a competitor to Hooters, is a relatively small company with an estimated equity value of $1.04 billion to $1.28 billion and 115 restaurants. The company’s owner, Fat Brands, plans to spin off Twin Peaks to pay off its debt.
Other restaurant companies monitoring the IPO market include Panera Brands, which has been exploring going public after a failed attempt in 2022. Fogo de Chao, a Brazilian steakhouse chain acquired by Bain Capital, is also considering an IPO when the market conditions are favorable. Additionally, Roark Capital’s Inspire Brands, a conglomerate that includes various restaurant chains, is another potential IPO candidate.
Despite challenges and uncertainties in the IPO market, these companies are evaluating their options and timing carefully before deciding to go public.
