Jersey Mike's Launches IPO Roadshow, Targets Valuation Up to $7.94 Billion

A sub shop worth almost $8 billion

Jersey Mike's Subs launched the roadshow for its initial public offering Monday, according to a company statement distributed via PR Newswire. The Tinton Falls, New Jersey-based sandwich chain is targeting a valuation of up to $7.94 billion, according to a regulatory filing reported by BNN Bloomberg.

The company and certain existing stockholders are offering 43,478,261 shares of Class A common stock priced between $21 and $25 apiece. That could raise up to roughly $1.09 billion, per BNN Bloomberg's review of the filing. Underwriters will also get a 30-day option to buy up to 6,521,739 additional shares to cover over-allotments, according to the PR Newswire release.

Jersey Mike's plans to list on the New York Stock Exchange under the ticker "JMKE." Morgan Stanley, Jefferies and J.P. Morgan are serving as global coordinators and joint bookrunning managers, with Barclays and Guggenheim Securities as co-global coordinators. The full underwriting roster is long: BofA Securities, Goldman Sachs, Evercore ISI, UBS, Baird, Wells Fargo, William Blair, RBC, Deutsche Bank, and more than a dozen others are listed as joint bookrunners or co-managers, per the company's own announcement.

Blackstone's payday

Blackstone bought Jersey Mike's last year for around $8 billion, according to BNN Bloomberg. The private equity giant had plans to grow the chain both in the U.S. and abroad. Now Blackstone is listed among the selling stockholders in this offering, meaning the firm stands to cash out some of its stake less than two years after buying in.

Private equity firms typically buy companies, load them up with growth capital and management support, then take them public or sell them a few years later. Here, an $8 billion buyout is followed by a roadshow targeting a valuation just shy of $7.94 billion, a slight discount to what Blackstone paid, though the final pricing isn't locked in yet.

Jersey Mike's is run by CEO Peter Cancro, who started working at the original Point Pleasant, New Jersey storefront in 1956, back when it was called Mike's Subs. Cancro bought the shop in 1975 and began franchising it in 1987. Under his leadership, the chain grew to more than 3,300 locations across the U.S. and Canada, according to both BNN Bloomberg and the company's own IPO announcement. Jersey Mike's is also an official NFL partner.

The filing shows Jersey Mike's has plans to open 300 stores in the UK and Ireland in partnership with Cancro, according to BNN Bloomberg's reporting on the regulatory documents. This represents the international expansion Blackstone was reportedly banking on when it bought the chain.

A test for restaurant IPOs

This listing is a rare event for the restaurant sector. BNN Bloomberg noted it follows Mediterranean chain Cava's IPO three years ago and Black Rock Coffee Bar's Nasdaq debut last year. Restaurant IPOs don't happen often, and when they do, investors' appetite for fast-casual dining is closely watched after years of inflation squeezing both restaurant margins and customer wallets.

The broader IPO market has had a strong run. BNN Bloomberg reported that the U.S. IPO market rebounded in the quarter ended June, with proceeds pushing past $100 billion. That followed a slowdown tied to the U.S.-Iran conflict earlier in the year. Jersey Mike's now becomes a test case for whether that momentum extends to consumer-facing restaurant brands, not just tech and other large offerings.

What's still unknown

The registration statement on Form S-1 has been filed with the Securities and Exchange Commission but has not yet become effective, according to the company's own press release. That means the shares can't legally be sold yet, and the final price per share won't be set until the roadshow wraps and the deal is priced.

Neither source specifies exactly how much of the roughly $1.09 billion raised will go to Jersey Mike's itself versus how much goes to Blackstone and other selling stockholders pocketing proceeds from their stakes. That breakdown should become clearer once the prospectus is finalized and pricing is set, likely within the next couple of weeks based on typical IPO roadshow timelines. Investors weighing whether to buy in will want that number before the stock starts trading on the NYSE.