Potbelly (PBPB), the Chicago-based purveyor of made-to-order toasted sandwiches, began in 1977 as an antiques store that provided sandwiches and desserts to customers to boost sales. Now, It had 280 company-operated shops

Potbelly Jumps in Trading Debut After $105 Million IPO

Potbelly Corp. (PBPB), the Chicago-based purveyor of made-to-order toasted sandwiches, more than doubled in trading after pricing its IPO above an increased range. The shares surged to $31.28 at 10:12 a.m. in New York. The company and existing stockholders sold 7.5 million shares for $14 each, according to data compiled by Bloomberg, after offering them for $12 to $13. The company raised the range Oct. 2 after initially setting it at $9 to $11. Potbelly has been expanding in cities from Portland, Oregon, to New York and expects to open as many as 35 new shops this year, according to its prospectus. The company plans to use proceeds from the offering to support this growth, in addition to funding a dividend and paying back loans. Noodles & Co. (NDLS), the first U.S. restaurant IPO this year, also more than doubled in its June trading debut. The shares advanced 139 percent from the offering through yesterday.The Bloomberg U.S. Quick Service Restaurant Index, which includes companies such as McDonald’s Corp. and Yum! Brands Inc. (YUM), advanced 35 percent this year through yesterday, almost double the 18 percent gain in the Standard & Poor’s 500 Index.

Potbelly began in 1977 as an antiques store that provided sandwiches and desserts to customers to boost sales. Revenue was $146.9 million in the first six months of 2013, an increase of 12 percent from a year ago, the filing shows. It had 280 company-operated shops as of June 30.

At the midpoint of the boosted price range, Potbelly would be valued at about $350.1 million, data compiled by Bloomberg show. The company sold 7.35 million shares, according to the original terms of the prospectus, while existing stockholders including affiliates of William Blair & Co. sold the rest. The shares sold are equivalent to about a 27 percent stake in the company.

Dividend Payment

Potbelly plans to use the funds from the offering to pay a $49.9 million dividend on shares of common and preferred stock outstanding on the day before the offering closes, according to the filing. Executive officers, directors and owners will receive about 86 percent of the dividend.

Bank of America Corp. and Goldman Sachs Group Inc. led the IPO. The shares are listed on the Nasdaq Stock Market under PBPB.

To contact the reporters on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net; Leslie Picker in New York at lpicker2@bloomberg.net

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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