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Portillo’s files to raise $405 million in stock offering

The restaurant chain is offering new shareholders a 28% stake in a business that has grown despite the pandemic.

The Portillo’s Hot Dogs at 7308 W. Lawrence Ave.
Portillo’s, based in Oak Brook, is selling a minority stake in a business that has withstood the pandemic well.
Brian Rich/Sun-Times file

The Portillo’s restaurant chain plans to raise up to $405.4 million in an initial public offering of its shares, the company said in a regulatory filing posted Tuesday.

Portillo’s, based in Oak Brook, is selling a minority stake in a business that has withstood the pandemic well. Financial results show the purveyor of Chicago-style hot dogs, burgers and Italian beef sandwiches has posted increasing revenue and profits despite a hit early in 2020 from shutdowns tied to COVID-19.

The restaurant chain plans to sell 20.27 million shares for between $17 and $20 each, according to the filing. There is no date yet for the IPO, which companies can defer if they don’t like market conditions.

The company would remain under the control of private equity firm Berkshire Partners. Owners of the newly issued Class A shares would have a 28% stake in Portillo’s, or 33% if the stock’s underwriters exercise an option to acquire an additional 3 million shares.

The proposed $20-a-share valuation would give Portillo’s a total market value of about $1.4 billion, according to the filing. The stock would trade on the Nasdaq Global Select Market under the symbol PTLO.

With 67 restaurants in nine states, Portillo’s said it plans to grow its locations by about 10% per year. While Chicago and the suburbs are its biggest market, it said most of the expansion will occur in other regions.

It said that in its 58 years, it has never closed a restaurant. Rather than lay off or furlough staff members during the pandemic, the company said it invested in training employees to shift the business toward deliveries.

Nevertheless, the company has seen labor unrest. In July, 18 workers at a Portillo’s centralized food preparation center in Addison walked off the job, complaining that their hours were increased with no overtime pay.

The nonprofit group Arise Chicago, a faith-based organization that promotes workers’ rights, was involved in the walkout. Spokeswoman Shelly Ruzicka had no immediate update on the workers’ issues Tuesday.

In its IPO filing with the Securities and Exchange Commission, Portillo’s said its revenue during the first half of 2021 was $258 million compared with $217 million for the same six-month period last year. It said its first-half profit was $14 million, which beat the full-year 2020 figure of $12 million.

The offering has a large group of underwriting firms, including Morgan Stanley, Piper Sandler and Chicago-based William Blair.