Louisville-based Rock Bottom Restaurants Inc. has hired an investment bank to explore a sale to a private-equity group and to examine the market for taking the restaurant chain public, the company’s founder said Thursday.
Frank Day, the company’s chairman since its inception in 1976, said Rock Bottom has within the last two months hired Piper Jaffray & Co., the Minneapolis-based investment bank, to explore its options.
“We want to grow again,” Day said. “We are headed to be a public company.”
John Imbergamo, a Denver-based restaurant consultant, said it would make more sense for Rock Bottom to sell itself than for Day to take the company public.
“I would be surprised if Frank (Day) and his team would want to expose themselves to the difficulties of being a public company again when he was clear about his aversion to being public,” Imbergamo said.
Day took the company public once before, in 1994. The company, which traded on Nasdaq, opened some 60 restaurants within three years, according to company materials.
In 1999, Day led an investment group that took Rock Bottom private again.
The 73-year-old entrepreneur said it might be time to once again tap the public market.
“I’m going to want to step off the bus or I’m going to fall off the bus,” Day said of exiting the company. Going public “would satisfy the needs of the company.”
Rock Bottom’s brands include Rock Bottom Restaurant & Brewery, Old Chicago, Sing Sing, Walnut Brewery and ChopHouse & Brewery. The company in 2005 had sales of $273 million and nearly 7,000 employees. It operates 94 restaurants throughout the U.S.
Day said the company would use the proceeds from a public offering to expand.
He added that selling Rock Bottom to a private-equity group would be a steppingstone toward an IPO. Imbergamo said Wall Street might have a hearty appetite for an offering.
“It’s grown some from when (Day) took it private,” he said. “That in combination with a highly successful IPO by Chipotle (Mexican Grill) could mean that the public market would be very generous to Rock Bottom.”
Denver-based Chipotle engineered one of the nation’s most successful IPOs earlier this year. Shares of the burrito chain have more than doubled since its offering in January.
Staff writer Will Shanley can be reached at 303-820-1260 or wshanley@denverpost.com.
