PANERA TO GO PUBLIC
Panera Brands filed its intent to go public on Tuesday but did not provide details on the pricing or timing of its IPO. As a twist, Danny Meyer's special purpose acquisition company USHG Acquisition Corp. (HUGS) will become a significant shareholder according to a PR from HUGS just under $300 million in the IPO. Mr. Meyer will also invest directly in Panera Brands and become the lead independent director of its board following the completion of the IPO. The new Panera owns Panera Bread, Caribou Coffee, and Einstein Bros. Bagels. The enthusiasm around Panera will come from the previous history of being strong public equity. Other notable restaurant IPOs have performed exceptionally well in recent months: Chicago-based Portillo's Inc. is up over 120% from its recent IPO, while Dutch Bros Inc., a fast-growing coffee chain, is up over 180%.
Presto SPAC (VTAQ)
Another Restaurant technology company to go public. Presto confirmed a deal to go public with Ventoux CCM Acquisition Corp. (VTAQ), valuing Presto at $1.04B. The transaction will be funded by cash from the Ventoux of $172.5M (assuming no redemptions) and $70M of gross proceeds from a PIPE. The $70M PIPE includes capital from REMUS Capital investors, Presto Founder & CEO Rajat Suri, Sam Altman and Max Altman's Apollo project. Notable customers include franchisees of Yum! Brands, Applebee's, McDonald's, and Outback Steakhouse.
- According to the investor deck the rationale for the deal is:Presto is a market leader in labor productivity solutions for large chain restaurant enterprises, applying next-gen touch, vision and voice technologies to digitize a highly analog industry
- COVID-19 and subsequent labor challenges have created an industry reset, driving restaurants to embrace technology enablement Presto has built a leading restaurant technology platform to modernize on-premises restaurant dining-rooms and drive-thrus to maximize customer profitability and enhance the guest dining experience
- The transaction is expected to be completed in the first half of next year. Jefferies acts as the exclusive financial advisor to Presto, and Chardan and William Blair are advisors to Ventoux. Presto is known for kiosks and tablets that customers use to order and pay for food at restaurants. The Presto deal comes on the heels of Toast (TOST) going public.
Online grocery spending remains elevated after the delta variant (DASH)
Online grocery sales in October were $8.1B, about flat compared to the prior year, according to a survey from Brick Meets Click and Mercatus. The pickup continued to be the most popular, with a monthly active user (MAU) base of 33.4 million households. Ship to home's MAU was 29.8 million but has declined every month since July. 26.2 million households used delivery. Spending in ship to home decreased from $2.2B last year to $1.7B this October. Delivery and pickup increased from $5.9B to $6.4B this October. About half of US households in October purchased groceries online. In October, the average number of orders placed by monthly active users was 2.7, up 35% from pre-COVID levels. The average order value was up 12% to $80.88 for pickup and 18% to $85.13 for delivery compared to pre-pandemic levels, while ship to home was only 2% above 2019 at $45.57. The likelihood that an MAU will order again from the same online grocery service next month was 57.2%, down 4.2% points from the prior month.
