By Katie Roof and Crystal Tse
Shares sell for $28 apiece after being offered for $23 to $25
Sweetgreen reaches diluted value of about $3.4 billion
Sweetgreen Inc., the salad restaurant chain started in 2007 by Georgetown University graduates, raised $364 million in an initial public offering priced above a marketed range.
The company sold 13 million shares Wednesday for $28 each, according to a statement. It had marketed 12.5 million of the shares for $23 to $25.
At the IPO price, Sweetgreen has a market value of almost $3 billion based on the outstanding shares listed in its filings with the U.S. Securities and Exchange Commission. Accounting for employee stock options and similar holdings, the company has a fully diluted value closer to $3.4 billion.
The restaurant chain was valued at $1.78 billion in a January funding round led by Durable Capital Partners. Its biggest investors include affiliates of Fidelity Investments, T. Rowe Price, Revolution Growth, D1 Capital Partners, Anchorage Capital Group, and Lone Pine Capital, according to its filing.
Sweetgreen’s IPO is the the 12th this year in the U.S. in the food and beverage category, the most since 1997, according to data compiled by Bloomberg. Nearly all of these firms are trading below their offering price after listing at valuations that proved optimistic amid labor shortages, rising prices and a rocky earnings season for the sector.
Earlier Wednesday, yogurt maker Chobani Inc., filed to go public, disclosing shrinking losses and increased sales with the addition of products such as oat milk. Chobani will set terms for the share sale later.
Sweetgreen plans to use proceeds from the offering for general corporate purposes and working capital, as well as to develop the technology it acquired through the purchase of Spyce Food Co. Boston-based Spyce uses robotic cooking and serving techniques to automate much of its production line.
Sweetgreen, started by Jonathan Neman, Nathaniel Ru and Nicolas Jammet, operates 140 restaurants in 13 states. It had a net loss of $87 million on revenue of $243 million for the 39-week period ended Sept. 26, compared with a loss of more than $100 million on revenue of $161 million a year earlier, the filing shows.
The offering is being led by Goldman Sachs Group Inc. and JP Morgan Chase Co. Sweetgreen’s shares are expected to begin trading Thursday on the New York Stock Exchange under the symbol SG.